What is the deposit insurance premium on the deposits issued

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Godzilla Bank funds a $50,000 residential mortgage by allocating capital and by issuing demand deposits. The mortgage has a risk weight of 50%. The demand deposits have a reserve requirement of 10% and a deposit insurance premium of 3.8%.

Problem 1: Suppose the bank fund the mortgage by issuing demand deposits, what is the deposit insurance premium on the deposits issued to fund the mortgage?

Reference no: EM132972920

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