Multiple Choice
An FI funds a $5 million residential mortgage in 2017 by allocating capital and by issuing demand deposits.The mortgage represents a loan-to-value of 70 percent.The demand deposits have a reserve requirement of 10 percent and a deposit insurance premium of 23 basis points. What is the deposit insurance premium on the demand deposits issued to fund the mortgage?
A) $11,756.
B) $12,778.
C) $11,500.
D) $1,150.
E) $9,200.
Correct Answer:
Verified
Correct Answer:
Verified
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