Hutson Private Bank is evaluating a potential loan to Exxus Systems a microchip manufacturer. The loan has a principal amount of $500M and a term of 15 years. The interest rate on the loan is 4.25% per annum. Hutson will charge a one-time origination fee of 30 bps and an annual servicing fee of 15bps per annum. The loan is nearly identical to a second loan in their portfolio. Yearly prices for this loan are provided below. Suppose that Hutson's RAROC benchmark is 3.16% and the extreme loss on the loan, which occurs only 1% of the time, is taken from historical data. Should Hudson issue the loan? (the data is comma delimited so it can easily be imported in to excel) Date, Price

1/1/2003,330407.38

1/1/2004,357886.45

1/3/2005,260768.39

1/4/2006,328517.07

1/5/2007,392712.171

1/6/2008,275800.46

1/7/2009,367317.19

1/8/2010,272234.27

1/9/2011,329535.10

1/10/2012,283863.95