Lending rate for customer with a probability of default

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What is the lending rate for a customer with a probability of default of 1% and a loss given default of 28%. The funding rate is 6.3% and the VaR for the loan is 13 cents on the dollar. The bank benchmark is a 9.6% return on equity. Enter your answer as a decimal with four digits of precision.

Reference no: EM131488499

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