Question
.two types of the borrower: risk (R) safe(S) . both want a loan of size L . lender's cost of funds (r) which 10% .
.two types of the borrower: risk (R) safe(S)
. both want a loan of size L
. lender's cost of funds (r) which 10%
. the lender charged an interest rate(i) which is 40%
. what is the probability (p) of loan repayment, that the lender assumed?
a. 0.50
b. 0.90
c. 0.855
d. 0.785
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Intermediate Microeconomics
Authors: Hal R. Varian
9th edition
978-0393123975, 393123979, 393123960, 978-0393919677, 393919676, 978-0393123968
