Question
ESI uses the following rating scheme to classify the riskiness of its customers. Risk ClassRisk Premium (%) Prime.05High grade1.0Upper medium grade1.5Lower medium grade2.0Speculative: Non-investment grade4.0Speculative:
ESI uses the following rating scheme to classify the riskiness of its customers.
Risk ClassRisk Premium (%)Prime.05High grade1.0Upper medium grade1.5Lower medium grade2.0Speculative: Non-investment grade4.0Speculative: Highly6.0Substantial risks9.0Extremely speculative12.0
The bank's pure rate of interest is 1.5% and the inflation premium is 3%.
What rate would the bank offer a customer who is in the upper medium grade risk class?
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MATLAB An Introduction With Applications
Authors: Amos Gilat
6th Edition
111938513X, 978-1119385134
