Question: please give a detailed answer (with all calculations) . RISK-SHIFTING AT THE FIRM LEVEL (1) Consider the following two projects: Safe: Invest 100 and obtain

please give a detailed answer (with all calculations)

. RISK-SHIFTING AT THE FIRM LEVEL (1) Consider the following two projects: Safe: Invest 100 and obtain 140 for certain Risky: Invest 100 and obtain 150 with probability 0.5 and OE otherwise 1. Which project would the firm choose if it funds the project with its own funds? 2. Which project would the firm choose if it funds the project with a loan at a rate r? 3. What's the rate r that maximizes the bank's profits

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