Confidence Bank has made a loan to Risky Corporation. The loan terms include a default risk$-$free borrowing rate of $6\mathrm{.}9$ percent, a

risk premium of $3\mathrm{.}3$ percent, an origination fee of $0\mathrm{.}1641$ percent, and a $6\mathrm{.}1$ percent compensating balance requirement. Required

reserves at the Fed are $6\mathrm{.}6$ percent. What is the expected or promised gross return on the loan?

a$.12\mathrm{.}64\%$

b$.12\mathrm{.}56\%$

c$.9\mathrm{.}89\%$

d$.12\mathrm{.}09\%$

e$.10\mathrm{.}99\%$

The following represents two yield curves.

What is the implied probability of repayment on one$-$year B$-$rated debt?

a$.99\mathrm{.}10\%$

b$.95\mathrm{.}61\%$

c$.86\mathrm{.}66\%$

d$.91\mathrm{.}47\%$

e$.96\mathrm{.}29\%$