Consider a loan portfolio of $100 million principal which pays an annual rate of 9%. The economic capital against such a loan is estimated to be $6 million (i. e. 6% of the loan). The capital can be invested in government securities returning 2% per annum. The $100 million should be raised by deposits with an interest rate of 6%. The bank has an operating cost of $1 million per annum. The expected loss on this portfolio is assumed to be 0.75% per annum. Please calculate the RAROC for this loan portfolio.
Answers: 3
Another question on Business
Business, 22.06.2019 10:20
Asmartphone manufacturing company uses social media to achieve different business objectives. match each social media activity of the company to the objective it the company achieve.
Answers: 3
Business, 22.06.2019 17:30
What do you think: would it be more profitable to own 200 shares of penny’s pickles or 1 share of exxon? why do you think that?
Answers: 1
Business, 22.06.2019 17:30
An essential element of being receptive to messages is to have an open mind true or false
Answers: 2
Business, 22.06.2019 21:50
Assume that (i) setups need to be completed first; (ii) a setup can only start once the batch has arrived at the resource, and (iii) all flow units of a batch need to be processed at a resource before any of the units of the batch can be moved to the next resource. process step 1 molding 2 painting 3 dressing setup time 15 min. 30 min. no setup processing time 0.25 min./unit 0.15 min./unit 0.30 min./unit which batch size would minimize inventory without decreasing the process capacity?
Answers: 1
You know the right answer?
Consider a loan portfolio of $100 million principal which pays an annual rate of 9%. The economic ca...
Questions
History, 15.04.2020 23:02
Mathematics, 15.04.2020 23:02
Mathematics, 15.04.2020 23:03
History, 15.04.2020 23:03
Mathematics, 15.04.2020 23:03
Chemistry, 15.04.2020 23:03
Computers and Technology, 15.04.2020 23:03
