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A healthy bank with $15 billion in assets will be formally examined by regulators Annually Every three years Semi-annually Every two years For a one-month payday loan of $200, suppose the origination and servicing cost is $5, and r=.01 (per month). If the risk of default is 5% and the recovery rate is 10%, then what is the dollar fee required to provide the lender with their required expected return? $18.26 $14.57 $16.43 $17.11 $15.89 $17.74 Assume the 1-year Treasury Bill rate is zero, and all investors are risk-neutral. An entrepreneur has no money and has an idea that requires a 200 investment. With 50% probability, the investment will produce a cash flow of 300 in one year. With 50% probability, the investment will produce a cash flow of 160 in one year. A bank should charge no less than on a one-year loan on the project. 20% 30% 40% In the United States, if a bank has a ratio of stockholder's equity to assets of 5%, it would probably Receive a relatively strong 'C' rating from its regulator Receive a relatively weak 'C' rating from its regulator