Eurocredit loan: A Swiss sporting goods company borrows in yen in the Eurocredit market at a rate

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Eurocredit loan: A Swiss sporting goods company borrows in yen in the Eurocredit market at a rate of 4.35 percent from Bank of America using a three-month rollover loan. Bank of America assigns a default risk premium of 2 percent on the loan, the country risk is an additional 0.75 percent, and the foreign exchange rate risk premium is 0.25 percent. The bank can borrow funds in the Euromarket at the three-month LIBOR rate of 0.26 percent. What is Bank of America’s gross profit margin on this loan?

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