Why could a lenders expected return be lower when the risk premium is increased on a loan?

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Why could a lender’s expected return be lower when the risk premium is increased on a loan? In addition to the risk premium, how can a lender increase the expected return on a wholesale loan?

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Financial Institutions Management A Risk Management Approach

ISBN: 9781266138225

11th International Edition

Authors: Anthony Saunders, Marcia Millon Cornett, Otgo Erhemjamts

Question Posted: Jun 04, 2024 01:09 AM

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Why could a lenders expected return be lower when the risk premium is increased on a loan?

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Financial Institutions Management A Risk Management Approach

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