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What is the expected return on this loan

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Reference no: EM132028164

Calculate the promised return (k) on a loan if the base rate is 13 percent, the risk premium is 2 percent, the compensating balance requirement is 5 percent, fees are 12 percent and reserve requirements are 10 percent.

What is the expected return on this loan if the probability of default is 5 percent?

Reference no: EM132028164

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