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5. Consider a bank with the following balance sheet. You read in the local newspaper that the bank's return on assets (ROA) was 1 percent.

5.Consider a bank with the following balance sheet. You read in the local newspaper that the bank's return on assets (ROA) was 1 percent. What were the bank's after-tax profits?

Bank Balance Sheet

(in thousands)

Assets

Liabilities

Reserves

$100

Deposits

$1,000

Loans

$500

Borrowing

$0

Securities

$500

Bank Capital

$100

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