Bank A has net profit after taxes of $1.8 million and the balance sheet on the left. Bank B has net profit after taxes of $2 million and the balance sheet on the right.

Bank A (in millions)					Bank B (in millions)
Assets		Liabilities			Assets		Liabilities
Reserves	$5	Deposits	$100		Reserves	$8	Deposits	$65
Loans	$70	Borrowing	$10		Loans	$52	Borrowing	$10
Securities	$45	Bank Capital	$10		Securities	$30	Bank Capital	$15

Instruction: Round your responses to 2 decimal places.

a. Based on the information provided above about Bank A, the return on assets (ROA) for Bank A is percent ? , the return on equity (ROE) for Bank A is percent ? , and the leverage ratio for Bank A is ?.

b. Based on the information provided above about Bank B, the return on assets (ROA) for Bank B is ? percent, the return on equity (ROE) for Bank B is ? percent, and the leverage ratio for Bank B is ?.

What would happen if all interest rates were to rise by 1 percent?

If the interest rate rises 1 percent, the bank's profit in the second year falls to $?.