23. Reed Bank, a bank with $1 Billion in deposits, has made a 4-year fully amortizing $10,000,000 term loan to Tyrant Corporation with the current Prime Lending Rate at 6.25% for America's most creditworthy borrowers. The loan terms include the boo borrowing rate, a credit risk premium of 2.75 percent, an origination fee of $25.000 (a% of the total loan amount), and a 10 percent compensating balance requirement Required reserves at the Fed are 9 percent. What is the expected or promised gross return on the loan? (8 points) A. 8.80% B. 11.55% C. 9.08% D. 8.00% E. 8.25% 24. What is the RAROC of the following loan (8 points) Given the following: Maturity = 4 DLN = 2.36 Large adverse AR = .015 R=12% Loan amount = $10,500,000 Annual Net Income from loan = .00275 of total loan amount (27.5 basis points) A. 8.80% B. 9.47% C. 8.29% D. 8.70% E. 8.25% 23. Reed Bank, a bank with $1 Billion in deposits, has made a 4-year fully amortizing $10,000,000 term loan to Tyrant Corporation with the current Prime Lending Rate at 6.25% for America's most creditworthy borrowers. The loan terms include the boo borrowing rate, a credit risk premium of 2.75 percent, an origination fee of $25.000 (a% of the total loan amount), and a 10 percent compensating balance requirement Required reserves at the Fed are 9 percent. What is the expected or promised gross return on the loan? (8 points) A. 8.80% B. 11.55% C. 9.08% D. 8.00% E. 8.25% 24. What is the RAROC of the following loan (8 points) Given the following: Maturity = 4 DLN = 2.36 Large adverse AR = .015 R=12% Loan amount = $10,500,000 Annual Net Income from loan = .00275 of total loan amount (27.5 basis points) A. 8.80% B. 9.47% C. 8.29% D. 8.70% E. 8.25%