Bank A has the following balance sheet as December 31, 2021:

Reserves $10m, loans $50m, deposits $60m, securities $10m. Please note that the Net profit after tax of the bank is is $4.00m

a) List the above items in a T account and calculate the Net Worth.

b) Calculate the return on equity of the bank

c) Additional deposits of $20m were added and $10m of loans were offered to new clients. Update the T account and calculate the return on assets and the equity multiplier.

d) After actions "c" above, would you be willing to invest in this bank? Explain.

e) The Manager of the Bank decided to decrease the Return on Equity by issuing new shares, would you agree with bank manager?