Suppose that a bank has equity of $50, interest expense of $15, PLL = $6, and net noninterest income of -$4 (all numbers in millions). Corporate tax rate = 40%.

12. If securities are $100 and are earning an average rate of return at 4%, and the bank has $500 in loans, what must be the average loan rate to generate the interest income of $41.67?

A. 7.53%

B. 9.70%

C. 8.35%

D. 9.12%

E. 10.20%