Jennifer Anniston (JA) Bank offers one-year loans with a 9 percent stated or base rate, charges a 0.25 percent loan origination fee, imposes a 10 percent compensating balance requirement, and must hold a 6 percent reserve requirement at the Federal Reserve. The loans typically are repaid at maturity.

i. If the risk premium for a given customer is 2.5 percent, what is the simple promised interest return on the loan?

ii. What is the contractually promised gross return on the loan per dollar lent?

iii. Which of the fee items has the greatest impact on the gross return?