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Moon Bank has made a loan to Lucky Corporation. The loan terms include a default risk- free borrowing rate of 8%, a risk premium of

Moon Bank has made a loan to Lucky Corporation. The loan terms include a default risk- free borrowing rate of 8%, a risk premium of 3%, an origination fee of 0.1875%, and a 9% compensating balance requirement. Required reserves at the Fed are 6%. What is the expected or promised gross return on loan?

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