QUESTION 14 Confidence Bank hasmade a loan to Risky Corporation. The loan terms include a defaultris
QUESTION 14 Confidence Bank hasmade a loan to Risky Corporation. The loan terms include a defaultrisk-free borrowing rate of 8 percent, a risk premium of 3 percent,an origination fee of 0.1875 percent, and a 9 percent compensatingbalance requirement. Required reserves at the Fed are 6 percent.What is the expected or promised gross return on the loan? . . .