Metrobank offers one-year loans with a 9 percent stated rate, charges a percent loan origination fee,

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Metrobank offers one-year loans with a 9 percent stated rate, charges a ¼ percent loan origination fee, imposes a 10 percent compensating balance requirement, and must pay a 6 percent reserve requirement to the Federal Reserve. What is the return to the bank on these loans?

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Financial Markets and Institutions

ISBN: 978-0077861667

6th edition

Authors: Anthony Saunders, Marcia Cornett

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