Suppose a bank can borrow at the monthly base rate imb and, Ask an Expert

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Suppose a bank can borrow at the monthly base rate im,b and lend out money at the sterling credit card lending rate im,c. Suppose a fraction d of borrowers never pay back the interest or what they borrow. Derive a formula that calculates the maximum value of d under which the bank still makes a profit lending money.

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Financial Management, Finance

Category:- Financial Management
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