Metrobank offers one-year loans with a 17 percent stated rate, charges a1/4 percent loan origination fee, imposes
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Question:
Metrobank offers one-year loans with a 17 percent stated rate, charges a1/4 percent loan origination fee, imposes a 8 percent compensating balance requirement, and must pay a 5 percent reserve requirement to the Federal Reserve. What is the return to the bank on these loans?
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