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Because the risk of default is not binary, it's on a sliding scale. If the banks are not allowed to charge enough interest to cover the risk of default, the loa
by alvah 8y ago
Because the risk of default is not binary, it's on a sliding scale. If the banks are not allowed to charge enough interest to cover the risk of default, the loan will not be made.
- vram22 8y agoGot it now, thanks. Like actuarial principles for insurance, I guess.