From the information in Table 2.6 , what can you conclude about the risk in holding a
Question:
From the information in Table 2.6 , what can you conclude about the risk in holding a representative bank’s equity compared to that in holding equity in a diversified market portfolio?
Table 2.6
Transcribed Image Text:
TABLE 2.6 FDIC-insured Commercial Banks in 2012 Return on Assets (in Percent) 0.74 0.87 1.19 1.00 1.00 Asset Size Less than $100 million $100 million to $1 billion $1 billion to $10 billion More than $10 billion Total Source: FDIC Quarterly Banking Profile, December 2012. Return on Equity (in Percent) 6.34 8.13 10.10 8.89 8.92 Equity Capital (in Percent of Assets) 11.66 10.64 11.72 11.08 11.11
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (1 review)
Judging from the capital ratios shown in Table 26 one can argue th...View the full answer
Answered By
Charu Singhal
The experience was really good. Helping students with what help they need is very satisfying. So overall very good experience
0.00
0 Reviews
10+ Question Solved
Related Book For
Contemporary Financial Intermediation
ISBN: 9780124052086
4th Edition
Authors: Stuart I. Greenbaum, Anjan V. Thakor, Arnoud Boot
Question Posted:
Students also viewed these Engineering questions
-
In this problem, we consider the analysis of the combined information from both raters on the shoulder flexion (SF) scores in the posture measurement study. Thus, the questions below concern the data...
-
You are an analyst for a large public pension fund and you have been assigned the task of evaluating two different external portfolio managers (Y and Z). You consider the following historical average...
-
As an equities analyst researching KYMG Ltd, you are trying to determine whether the current share price is fairly priced or not. You have obtained the following information: KYMG is expected to pay...
-
The standard cost card for Balsam indicates each unit of product should take 1.5 hours of direct labor at a cost of $10 per hour. During the current period, Balsam produced 3,000 units, used 5,000...
-
In a biomedical research activity it was determined that the survival time, in weeks, of an animal when subjected to a certain exposure of gamma radiation has a gamma distribution with a =5 and 3...
-
What can professors do to better prepare students in sales classes?
-
1. What is the sum of the first 10 terms of the geometric sequence with first term \(a_{1}=7\) and common ratio \(r=6 ?\) 2. What is the sum of the first 6 terms of the geometric sequence with first...
-
Sports, Inc., is a nationwide distributor of sporting equipment. The corporate president, Wesley Coldwell, is dissatisfied with corporate operating results, particularly those of the Spring Branch,...
-
Consider the case of LoRusso Company: The managers of LoRusso Company are considering replacing an existing piece of equipment, and have collected the following information: The new piece of...
-
Explain how a bank evolves from a primitive goldsmith and the roles played by asymmetric information and moral hazard in this evolution.
-
Find information on capital-to-total-assets ratios for several nonfinancial firms and compare them to those for financial firms. Why the differences?
-
A matrix organization is characterized by which of the following statements? a. It attempts to combine the elements of two organizational forms. b. It requires employees to follow decisions made by...
-
Photosynthesis, as it occurs in the leaves of a green plant, involves the transport of carbon dioxide \(\left(\mathrm{CO}_{2} ight)\) from the atmosphere to the chloroplasts of the leaves. The rate...
-
Find the probability density function of the random variable \(Z\) in terms of the known density function \(p_{U}(u)\) when (a) \(z=a u+b\), where \(a\) and \(b\) are real constants. (b)...
-
Companies will incur substantial costs to implement XBRL. What are some benefits of requiring companies to report interactive data in this format?
-
Which form of financing requires repayment, regardless of whether the company receiving the funds does well or not? a. A loan b. An investment c. Both a loan and an investment d. Neither a loan nor...
-
A company that purchases inventory costing \(\$ 10,000\) on terms \(2 / 10, n / 30\), but first returns one-half of those goods, will receive a discount of what amount if it pays on the last day of...
-
1. Assume Brenda has no reason to doubt Vincents veracity with respect to the statement that it is a one-time request. Should that make a difference in what Brenda decides to do? Why or why not? 2....
-
Smiths Family Fashions implemented a balanced scorecard performance measurement system several years ago. Smiths is a locally owned clothing retailer with fashions for men, women, teens, and...
-
Given that the rms speed of a helium atom at a certain temperature is 1 350 m/s, find by proportion the rms speed of an oxygen (O2) molecule at this temperature. The molar mass of O2 is 32.0 g/mol,...
-
A cylinder contains a mixture of helium and argon gas in equilibrium at 150C. (a) What is the average kinetic energy for each type of gas molecule? (b) What is the root-mean-square speed of each type...
-
A 5.00-L vessel contains nitrogen gas at 27.0C and a pressure of 3.00 atm. Find (a) The total translational kinetic energy of the gas molecules and (b) The average kinetic energy per molecule.
-
The fixed utilities cost per month for Barkoff is: Show answer choices None of the answer is correct. $4,040 $4,760 $4,400 $5,100 Question 6 0/2 Barkoff Enterprises, which uses the high-low method to...
-
Acquisition costs such as the fees of accountants and lawyers that were necessary to negotiate and consummate the purchase are O expensed in the period of the purchase O recorded as a deferred asset...
-
27 A1 CORPORATION, INC. Income Statement For the Year Ended December 31, 2026 Net Sales $240 Cost of Goods Sold 150 Gross Profit 90 Operating Expenses 65 $25 Net Income Using vertical analysis, what...
Study smarter with the SolutionInn App