Question: please give a detailed answer (with all computations) 1. Consider a bank with two potential borrowers. Borrower 1 requires a loan of $100 to invest

please give a detailed answer (with all computations)

1. Consider a bank with two potential borrowers. Borrower 1 requires a loan of $100 to invest in a project that returns $300 with probability 0.8 and $0 with the remaining probability. Borrower 2 requires a loan of $100 to invest in a project that returns $500 with probability 0.25 and $0 with the remaining probability. What would be the optimal capital requirement, as a function of the (social) shadow cost of capital p

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