If the bank wants to minimize the probabilities of losing money, which of the following does not make interest rates go up? A. A smaller pool of loans. B. A larger probability of default. C. A smaller...

If the bank wants to minimize the probabilities of losing money, which of the following does not make interest rates go up?

A. A smaller pool of loans.

B. A larger probability of default.

C. A smaller required probability of losing money.

D. The number of Monte Carlo simulations.

(Harder) What should the interest rate be so that the chance of losing money is 1 in 20? In math notation, what should the interest rate be so that Pr(S <>