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A bank's assets consist of the following: Cash $1.5 million Loans $10 million Securities $4.5 million Fixed Assets $2 million In addition, the bank's owners'

A bank's assets consist of the following:

Cash $1.5 million

Loans $10 million

Securities $4.5 million

Fixed Assets $2 million

In addition, the bank's owners' capital is $1.5 million.

A. Calculate the equity capital ratio.

B. If $2 million in bad loans were removed from the bank's assests, show how the equity capital ratio would change.

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