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Business, 14.10.2021 01:40 liluzisquirt7378

Suppose the entrepreneur is considering a bigger project that requires an investment of 200. He has to borrow the whole 200 from the bank. The bank can monitor the borrower to make sure that he chooses the safe project. Monitoring is very effective: with monitoring, the borrower always chooses the safe project. The cost of monitoring is 30. What is the minimum interest rate the bank should charge if the bank wants to break even

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Suppose the entrepreneur is considering a bigger project that requires an investment of 200. He has...
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