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Question
Standard Side Bank, a U.S. national bank, has $50 million in unimpaired capital and surpluses and $86 million in total time and savings deposits. Average revenue for the bank in the last three years is $12.5 million and a net interest income of $3.2 million. Pluto Inc. has applied for a loan of $9 million to the bank against which it is willing to provide $1 million worth of ten-year treasury securities. What is the maximum amount of loan the bank can make to Pluto?
A. $9 million
B. $4.5 million
C. $7.5 million
D. $8.5 million
E. $1 million
Answer
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