Assume that you are comparing the price-to-book ratios of the 13 largest banks in the United States in 2000. The following table summarizes the price-to book ratios and the returns on equity earned by these firms:

Company Name	PBV	ROE
Wachovia Corp.	2.05	18.47%
PNC Financial Serv.	2.54	21.56%
SunTrust Banks	1.91	15.35%
State Street Corp.	6.63	19.52%
Mellon Financial Corp.	4.59	23.95%
Morgan (JP) &	1.74	19.39%
First Union Corp.	1.52	19.66%
FleetBoston Fin'l.	2.25	20.15%
Bank of New	7.01	25.36%
Chase Manhattan Corp.	2.60	24.60%
Wells Fargo	3.07	17.72%
Bank of America	1.69	19.31%
Bank of Montreal	1.23	18.08%
Average	2.99	20.2%

a. If you were valuing SunTrust Banks relative to these firms, would you expect it to have a higher or lower price-to-book ratio than the average for the group? Explain why.

b. If you regress price-to-book ratios against returns on equity, what would your predicted price-to-book ratios be for each of these companies?