What is the essential idea behind risk$-$adjusted return on capital $($RAROC$)$ models?

Question $4$ options:

$1)$

Evaluating the actual or contractually promised annual ROA on a loan.

$2)$

Analyzing historic or past default risk experience.

$3)$

Balancing expected interest and fee income less the cost of funds against the loan's expected risk.

$4)$

Extracting expected default rates from the current term structure of interest rates.

$5)$

Dividing net interest and fees by the amount lent.