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Based on the following information about Banks A and B, compute for each the return on assets (ROA), return on equity (ROE), and leverage ratio.
Based on the following information about Banks A and B, compute for each the return on assets (ROA), return on equity (ROE), and leverage ratio. a. Bank A has net profit after taxes of $1.8 million and the following balance sheet: Reserves Loans Securities Assets Reserves Loans Bank Balance Sheet (in millions) $5 $45 $45 The return on assets (ROA) for Bank A: The return on equity (ROE) for Bank A: The leverage ratio for Bank A: Assets Securities Liabilities and Capital $75 $10 $10 b. Bank B has net profit after taxes of $1 million and the following balance sheet: Deposits Borrowings Bank Capital $8 $50 $22 percent 18 percent Bank Balance Sheet (in millions) Deposits Borrowings Bank Capital Instructions: Enter your responses rounded to two decimal places. Liabilities and Capital $80 $2 $8
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