Is a good investment for the bank

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Question 1: Another bank needing liquidity has offered to sell your bank a loan they originated for $215,000. The loan has a principle balance of $213,000 (this is what your bank will pay for the loan) with payments of $2,000 a month for 15 years. The borrower is B+ credit. Your desired rate of return is 7.5% for B+ credit. Is this a good investment for the bank?

Reference no: EM132483844

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