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A $258405 loan has a duration of 5.1 years. This loan generates one-year income of $2943. The current interest rate level is 6.56% and a
A $258405 loan has a duration of 5.1 years. This loan generates one-year income of $2943. The current interest rate level is 6.56% and a sudden change in the credit premium of 1.98% is expected. Calculate the loan's RAROC (risk-adjust return on capital). Round your answer up to 4 decimal places in decimal term, i.e., enter 0.1234 instead of 12.34%.
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