Answered: Using the following information,…

Using the following information, calculate the RAROC. •Risk-Adjusted Return: $80,000 •Loan Amount: $3,000,000 •Capital Requirement: 10% •Capital Ratio: 75% a) 28.75% b) 33.33% c) 35.56%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 7PROB

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Question

Using the following information, calculate the RAROC.

•Risk-Adjusted Return: $80,000
•Loan Amount: $3,000,000
•Capital Requirement: 10%
•Capital Ratio: 75%

a) 28.75%

b) 33.33%

c) 35.56%

d) 38.25%

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