will know its duration.

Question $14(4$ points$)$

Confidence Bank has made a loan to Risky Corporation. The loan terms include a default risk$-$free borrowing rate of $8$ percent, a risk premium of $3$ percent, an origination fee of $0\mathrm{.}1875$ percent, and a $9$ percent compensating balance requirement. Required reserves at the Fed are $6$ percent. What is the expected or promised gross return on the loan?

A$)11\mathrm{.}19$ percent

B$)11\mathrm{.}90$ percent

C$)12\mathrm{.}29$ percent

D$)12\mathrm{.}22$ percent

$$ E$)$ None of the above