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A bank has a listed prime rate of 7 percent. They have estimated that the marginal cost of raising funds is 6 percent, their default

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A bank has a listed prime rate of 7 percent. They have estimated that the marginal cost of raising funds is 6 percent, their default risk premium on a loan is 1.5 percent and that they want a profit margin of 2 percent. They have also estimated that the term risk premium is 0.5 percent. What is the interest rate this bank will charge if they use the cost-plus pricing model? 8.5 percent 9.0 percent 12.0 percent 9.5 percent O None of the options is correct

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