Question 3: Assume the following expected income on the loan of $200,000: . Interest Income rate on loans F 7% Interest

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Question 3 Assume The Following Expected Income On The Loan Of 200 000 Interest Income Rate On Loans F 7 Interest 1 (253.55 KiB) Viewed 22 times

Question 3: Assume the following expected income on the loan of $200,000: . Interest Income rate on loans F 7% Interest expense rate on deposit accounts that will fund the loan = 5.5% ✔ Overhead expense rate to administer the loans = .75% Expected loss rate on the loan 40% H Part A. If the "economic capital" is $7,000 what is the Risk Adjusted Rate of Return? Part B. Should the bank make this loan if the expected hurdle rate is 15%? Input your answer in the .XXXX format Input your answer as either Yes or No