Bank offers a loan on the terms

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Reference no: EM13924699

Suppose that a bank offers a loan on the following terms:

The base rate is 5% and risk margin 3%

Loan origination fee to the borrower is 1/10 %

Compensating balance is 5%

Reserve requirements rate is 10%

Calculate the bank’s ROA on this loan.

Reference no: EM13924699

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