What is bank humpty dumpty gross return on asset

Reference no: EM132041689

Question: Bank Humpty Dumpty has a base lending rate of 9.0% (BR), and charges a certain customer a 130 basis point risk premium (m). The bank also charges a 0.5% origination fee (f). The bank requires the borrower to maintain compensating balances (b) of 10% of the loan amount. The reserve requirement (RR) is 15% and the loan amount is $1 million What is Bank Humpty Dumpty's gross return on asset (ROA)?

Reference no: EM132041689

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