8. PA National Bank is considering a loan of $15M to Saks Corporation. Duration of the loan is 5 years. The loan rate is 12% with no additional fees. The cost of funds to PA Bank is 9%. PA Bank estimates that the risk premium on the loan will not increase by more than 2.5% with a probability of 95%: Using the RAROC model, which of the following is false? a. The expected one-year net income on the loan is less than $.5M. b. The loan risk estimate based on 95% probability exceeds $1.65M. C. RAROC falls short of the cost of funds, thus the loan should not be approved. d. RAROC exceeds the cost of funds, thus the loan should be approved