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Bank Y and Bank Z both have assets of $1 billion. The return on assets for both banks is the same. Bank Y has liabilities

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Bank Y and Bank Z both have assets of $1 billion. The return on assets for both banks is the same. Bank Y has liabilities of $750 million while Bank Z's liabilities are $850 million. In which bank would you prefer to hold an equity stake? Instructions: Enter your numeric responses rounded to the nearest whole number. If both banks have $1 billion in assets and have the same return on assets, then net profit after taxes must be the same for the two banks. Bank Y has bank capital of $ million while Bank Z has bank capital of $| million, so the return on equity is higher for Bank Z Bank Z has a higher leverage ratio than Bank Y; however, a higher portion of its assets is financed from borrowed funds. Therefore, Bank Z represents a riskier investment 9 M

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