Question: QUESTION 1(b) [ 5 marks] Why could a lender's expected return be lower when the risk premium is increased in a loan? Discuss how collateral

QUESTION 1(b) [ 5 marks] Why could a lender's expected return be lower when the risk premium is increased in a loan? Discuss how collateral and fees can increase the lender's expected return. What impact do inflationary pressures have on returns for the bank? Be specific on all parts of the

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