A bank classifies borrowers as high-risk or low-risk. Only 15% of its loans are made to those
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A bank classifies borrowers as high-risk or low-risk. Only 15% of its loans are made to those in the high-risk category. Of all its loans, 5% are in default, and 40% of those in de- fault are to high-risk borrowers. What is the probability that a high-risk borrower will default?
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