The Coupon Rate Promised to Investors on Securities Issued Against

The coupon rate promised to investors on securities issued against a pool of loans is 6.5%.The default rate on the pool of loans is expected to be 3.5%.The fee to compensate a servicing institution for collecting payments on the loan is 2%.Fees to set up credit and liquidity enhancements are 5%.The residual income on this pool of loans is 7%.What is the expected yield on this pool of loans?

A) 24%
B) 12%
C) 10%
D) 6.5%
E) None of the options is correct.