1.If a bank's return on assets (ROA) is 1%, and its asset-to-equity ratio (equity multiplier) is 10, then the bank's return on equity (ROE) is?

2.Compared to commercial banks and thrift institutions, finance companies are:

a)heavily regulated.

b)prevented from making relatively small loans.

c)virtually unregulated.

d)able to attract small depositors.

3.Which of the following is an example where a bank is increasing its degree ofcredit rationing (raising its credit standards) for new loans?

a)Lowering the interest rate on loans

b)Increasing the size of individual loans.

c)Reducing the collateral required for a loan.

d)Increasing the probability of rejecting a loan application.