Suppose a borrower with a 25% risk of default and no collateral wants to borrow from a lender whose alternative rate of return is 5%. What is the lowest interest rate that the lender will charge? [Enter your solution as a percent, e.g. 10 means 10% ]

Suppose a borrower with a 25% risk of default and no collateral wants to borrow from a lender whose alternative rate of return is 5%. What is the lowest interest rate that the lender will charge? [Enter your solution as a percent, e.g. 10 means 10% ]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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