Consider the Following Scenario: an FI Charges a 0

question 34

Multiple Choice

Consider the following scenario: an FI charges a 0.5 per cent loan origination fee and imposes a 10 per cent compensating balance requirement to be held as non-interest bearing demand deposits. It further sets aside reserves held at the central bank. The value of these reserves is 15 per cent of deposits. What is the base lending rate if the credit risk premium is 3.055 per cent and the ROA on the loan is 17 per cent?

• A) 11.5 per cent
• B) 13.945 per cent
• C) 12 per cent
• D) 20.055 per cent

Identify the effects of economic, political, and sociocultural factors on international business operations.

Evaluate the impact of global operations on a company's competitiveness.

Recognize the importance of adapting business strategies to international markets.

Understand the role and implications of host and home countries in international business.