What is minimum continuously compounded interest rate

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An investor's required real rate of return is 3% continuously compounded. The continuously compounded inflation rate for the next 2 years is known to be 2%. The investor makes a 2 year loan that has 10% probability of default, with an expected recovery of 25% in the event of default. What is the minimum continuously compounded interest rate that could be acceptable to this investor for this loan?

Reference no: EM131523276

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