Question
A bank raises deposits (and pays 1% on them) so that the bank has $400 in assets, $300 in deposits, and $100 in net worth.
A bank raises deposits (and pays 1% on them) so that the bank has $400 in assets, $300 in deposits, and $100 in net worth. Suppose that the bank doesn't have to hold any reserves and that assets earn 3% per year. How much is this bank earning on its bank capital?
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Accounting
Authors: Carl S. Warren, Christine Jonick, Jennifer Schneider
28th Edition
1337902683, 978-1337902687
