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

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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