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QUESTION
Consider an entrepreneur who needs a $500 loan to invest in a risky project that produces revenue of $800 with probability 0.6 and revenue $0...
Consider an entrepreneur who needs a $500 loan to invest in a risky project that produces revenue of $800 with probability 0.6 and revenue $0 otherwise. What is the minimum collateral the bank needs to charge this borrower to persuade him not to borrow if the loan repayment is $575?
Question;Consider an entrepreneur who needs a $500 loan to invest in a risky project that produces revenue of$800 with probability 0.6 and revenue $0 otherwise. What is the minimum collateral the...