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:

Bank Balance Sheet
(in millions)
Assets		Liabilities and Capital
Reserves	$5	Deposits	$100
Loans	$70	Borrowings	$10
Securities	$45	Bank Capital	$10

Instructions: Enter your responses rounded to two decimal places.

The return on assets (ROA) for Bank A: 1.50 Numeric Response1. Edit Unavailable.1.50correct.percent

The return on equity (ROE) for Bank A: 18.00 Numeric Response2. Edit Unavailable.18.00correct.percent

The leverage ratio for Bank A: 12.00 Numeric Response3. Edit Unavailable.12.00correct.

b. Bank B has net profit after taxes of $2 million and the following balance sheet:

Bank Balance Sheet
(in millions)
Assets		Liabilities and Capital
Reserves	$10	Deposits	$65
Loans	$45	Borrowings	$10
Securities	$30	Bank Capital	$10

Instructions: Enter your responses rounded to two decimal places.

The return on assets (ROA) for Bank B: 2.35 Numeric Response4. Edit Unavailable.2.35correct.percent

The return on equity (ROE) for Bank B: 20.00 Numeric Response5. Edit Unavailable.20.00correct.percent

The leverage ratio for Bank B: 7.50