Assume a bank’s review of its historical loan losses has been estimated at 1.33% for its auto loans. The bank currently has gross auto loans of $2,000,000. If the bank determines that the optimal or desired rate (r) for its auto loans is 4.5%, what rate should it charge to compensate for its expected losses?

Answer rating: 100% (QA)

Banks historical loan loss rate for auto loans is 133 Bank has ... View the full answer