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what's the default probability? Consider the following problem with asymmetric information in the credit market. Suppose the lending interest rate (r1) is 3.5%, and the

what's the default probability?

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Consider the following problem with asymmetric information in the credit market. Suppose the lending interest rate (r1) is 3.5%, and the borrowing interest rate (r2) is 10%. What fraction of borrowers will not default on their loans? O A. 94.1% O B. 5.9% O C. 96.1% O D. 3.9% O E. None of the above

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