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 $850 million while Bank Zs liabilities are $950 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

(Click to select) the same different 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 (Click to select) lower higher for Bank Z.

Bank Z has a (Click to select) higher lower leverage ratio than Bank Y; however, a higher portion of its assets is financed from (Click to select) borrowed nonborrowed funds. Therefore, Bank Z represents a (Click to select) riskier safer investment.