A $200 million loan commitment has an up-front fee of 20 basis points and a back-end fee of 25 basis points on the unused portion.
-If the FI had contingent assets of $40 million and contingent liabilities of $160 million, calculate the stockholder's true net worth (ignore the option mentioned in previous question).
A)-$60 million.
B)$60 million.
C)$70 million.
D)-$160 million.
E)$190 million.

Question

Quizplus · Accepted Answer

The correct answer is A because the stockholder's true net worth is $200 million - $40 million + $160 million = $220 million.

A $200 Million Loan Commitment Has an Up-Front Fee of 20