A business applies for 1 million loan for a project and plans to repay the loan in one year. A loan officer estimates the payoff from the project will be 1.3 million with 85% probability and 0.7 million with 15% probability. If a loan defaults, on average, a bank can get 65% of the salvage value. If the bank requires 2% return on its loans and the risk free rate to be 3%, what would be the loan rate? If the salvage ratio is 85% and other parameters stay same, what would be the loan rate? How the ability to increase salvage ratio affects loan rate?
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more