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A banks assets consist of: Cash: $1.5 million Loans: $10 million Securities: $4.5 million Fixed assets: $2 million In addition, the banks owners capital is
A banks assets consist of: Cash: $1.5 million Loans: $10 million Securities: $4.5 million Fixed assets: $2 million In addition, the banks owners capital is $1.5 million. a. Calculate the equity capital ratio. b. If $2 million in bad loans were removed from the banks assets, show how the equity capital ratio would change.
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