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You are considering buying a loan from a local bank with the following features: Loan principal: $10,000 Term: 5 years Stated rate: 7% Current market

You are considering buying a loan from a local bank with the following features:

Loan principal: $10,000

Term: 5 years

Stated rate: 7%

Current market value: 9,500

What rate of return can you expect from this loan?

Select one:

a. 7.97%b. 8.03%c. 8.26%d. 8.89%e. 9.21%

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