Suppose that a bank does the following: a. Sets a loan rate on a prospective loan with BR = 8.27% and ϕ = 3.16%. b.

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answerhappygod
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Suppose that a bank does the following: a. Sets a loan rate on a prospective loan with BR = 8.27% and ϕ = 3.16%. b.

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Suppose that a bank does the following:
a. Sets a loan rate on a prospective loan with BR =8.27% and ϕ = 3.16%. b. Charges a 0.35 percent loan origination fee to theborrower. c. Imposes a 5 percent compensating balance requirement to beheld as noninterest-bearing demand deposits. d. Holds reserve requirements of 9 percent imposed by theFederal Reserve on the bank’s demand deposits.
Calculate the bank’s ROA on this loan.
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