Use the Following Information for Questions

Use the following information for questions
There are two types of borrowers, low risk L and high risk H.As a lending officer, you cannot distinguish between the two types of borrowers.You believe, however, that there is a 0.5 probability that a randomly chosen borrower is L, and 0.5 that it is H.There are 500 potential loan applicants, each requiring $150.Type L will invest this loan in a single-period project that pays $250 with probability 0.8 or zero with probability 0.2.Type H will invest the loan in a single-period project that pays $275 with probability 0.5 and zero with probability 0.5.Your bank is a monopolist to these borrowers.The riskless interest rate is 6%, and a borrower must have at least $2 of net profit in the successful state in order to apply for the loan.Everybody is risk neutral and suppose that you have $75,000 to lend.
-What would be the bank's expected profit if the bank charge 65% rate?

A) -$1,025
B) -$876.66
C) $344.78
D) $754.65
E) $884.43