I ask you to lend me $500 and assume that the probability of receiving full payment, at riskless rate of 3%, of $515 is 97%, the probability of receiving $100 is 2%, and the probability of receiving...

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Extracted text: I ask you to lend me $500 and assume that the probability of receiving full payment, at riskless rate of 3%, of $515 is 97%, the probability of receiving $100 is 2%, and the probability of receiving zero payment is 1%. If the bond quotes a rate of return of 11%, what is the risk premium? 5.890% None of the given answers is correct O 5.634% O 5.773% O 5.209%