Question 29 2.5 pts Auburn Bank offers one-year loans with a 12% stated or base...
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Question 29 2.5 pts Auburn Bank offers one-year loans with a 12% stated or base rate, charges a 0.85% loan origination fee, imposes a 20% compensating balance requirement, and must pay a 5% reserve requirement to the Federal Reserve. The loans typically are repaid at maturity. If the risk premium for a given customer is 3%, what is the contractually promised gross return on the loan per dollar lent? O 21.13% O 18.52% O 19.81% O 17.36% O 19.57%
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