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A business borrower applies for a 2 million loan from the bank for 4 years. The loan rate is 8%, and the loan has various

A business borrower applies for a 2 million loan from the bank for 4 years. The loan rate is 8%, and the loan has various fees of 0.5%. The spread rate of the loan is 0.021 and the discount rate(△R/(1+RL) is 150 basis points. The expected loss rate of this lending is 1.5%. 


What is the RAROC of this loan, given 25% as the tax rate of the bank?

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