What is the highest rate the bank can pay on time deposits

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Dalian State Bank Balance Sheet 12/31/10 Millions of RMB Assets Liabilities Construction Loans ¥25 Demand Deposits ¥ 35 Home Loans 75 Time Deposits 62 Equity Capital 3 Totals ¥100 ¥100 15. Construction loans pay off in 1 year and earn 6%. Home loans are long term assets and earn 4%. Demand deposits cost 2%. What is the highest rate the bank can pay on time deposits to achieve the required return of 7% to bank shareholders? A. 8.33% B. ¥210,000 C. 6.78% D. 5.8% E. 4%

Reference no: EM131014393

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