What is the current market value of the loan

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Global Corporation has a $200,000 loan that will mature in one year. The risk-free interest rate is 6 percent. The standard deviation in the rate of change in the underlying asset's value is 12 percent, and the leverage ratio for Global Corporation is 0.8 (80 percent). The value for N(h1) is 0.02743, and the value for N(h2) is 0.96406. What is the current market value of the loan? Briefly discuss.

Reference no: EM132354531

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