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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.

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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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