Bank A has the following balance sheet

Reserves $5m, loans $40m,and Deposits $35m. Net profit of the bank is $1.5m

a. The return on equity of the bank is 0.15. how much is capital of the bank?

b. Calculate the return on assets, and the equity multiplier.

c. Additional deposits of 5m were added and 3m of loans were offered to new clients. Recalculate thereturn on assets, the return on equity, and the equity multiplier.

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

e. The Manager of Bank decided to increase the Return on Equity. What are the appropriate actions would the manage take?