a) Bank Windhoek reported an ROE of 16% and an ROA of 1.32%. What is the equity multiplier? How well capitalized is this bank?(5)

b) In January 2009, Greece government announced it would not honor its sovereign (government-issued) debt. Many investors were left holding Greece bonds priced at a fraction of their previous value. A few years later, Greece announced it would pay back 30% of the face value of its debt. Comment on the effects of information asymmetries on government bond markets. Do you think investors are currently willing to buy bonds issued by the government of Greece?(10)