Question
Q2. A bank charges a commercial borrower a 6.55 percent interest rate on a one-year loan. The bank also charges a 0.5 percent origination fee
Q2. A bank charges a commercial borrower a 6.55 percent interest rate on a one-year loan. The bank also charges a 0.5 percent origination fee and requires compensating balances of 7 percent in the form of demand deposits. Reserve requirements are 10 percent. What is the promised gross rate of return on the loan?
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The Economics Of Money Banking And Financial Markets
Authors: Frederic S. Mishkin
12th Global Edition
1292268859, 978-1292268859
