An FI Operating in the United States Funds a US$5

Multiple Choice

An FI operating in the United States funds a US$5 million residential mortgage in 2014 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 to FDIC 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.