A financial institution currently uses a base rate of 5%, charges an origination fee of 0.64% and
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A financial institution currently uses a base rate of 5%, charges an origination fee of 0.64% and requires a compensating balance of 15%. The Federal Reserve imposes a 10% reserve requirement on the bank's demand deposits. For a customer with a 3.6% risk premium, calculate the bank's ROA on the loan.
Related Book For
Financial Institutions Management A Risk Management Approach
ISBN: 978-0071051590
8th edition
Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders
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