Using your selected funding option under 1 year bonds $100million and 2.5% interest rate, and all loans has interest rate of 5%  which interest rate does Rosy Bank charge on the new loans, keeping in mind the 15% ROE target? You don't need to take into account the yield on existing assets.

2. which actions the banks take to achieve 15% target ROE?

Answer rating: 100% (QA)

To achieve a 15 target return on equity ROE Rosy Bank needs to ensure that the interest rate charged on new loans generates sufficient interest income ... View the full answer