Question
Glenville Bank is currently faced with high demand for additional new loans: $50m in household loans, and $30m in business loans. The bank has decided
Glenville Bank is currently faced with high demand for additional new loans: $50m in household loans, and $30m in business loans. The bank has decided to finance this new pool of loans using the following funding mix: Household loans to be funded by savings deposits (35%), fixed deposits (55%), and equity (10%); Business loans to be funded by fixed deposits (25%), certificates of deposit (60%), and equity (15%). Calculate the pooled marginal cost of funds for the household loan funding mix in percentage terms, given the following information for Glenville Bank: Funding Source Marginal Cost of Funds (per annum) Savings deposits 5.5% Fixed deposits 7.5% Certificates of deposit 9% Equity 12% answer please help its urgent.!!! only right answer and explain each steps. and be sure
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