Multiple Choice
A certain loan category has a 2.1% default rate and defaulted loans have a -10% return. Loans that don't default earn whatever rate the bank charges. If the lending bank wishes to earn a 4.5% average return on this loan category, including defaulted loans, what rate must the bank charge each borrower?
A) 4.752%
B) 4.811%
C) 4.925%
D) 4.756%
Correct Answer:
Verified
Correct Answer:
Verified
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