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For why the investor pays $73, it's right there in your quote: > an Investor pays $73 for a $75 loan, discounted for risk, fees, and return expectations The i

For why the investor pays $73, it's right there in your quote: > an Investor pays $73 for a $75 loan, discounted for risk, fees, and return expectations The investor doesn't expect to get 100% of that $75 back on average. The $25 is the first payment, which is made immediately.

janosch_123 1y ago
Oh of course the investor buys $75 of debt for $73, I get it now. I somehow had it in my head the other way around that he can borrow $75 for $73 which wouldn't make sense. Thank you.