Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Based on the following information about Banks A and B, compute for each the return on assets (ROA), return on equity (ROE), and everage ratio
Based on the following information about Banks A and B, compute for each the return on assets (ROA), return on equity (ROE), and everage 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 Reserves Loans Securities $5 $70 $45 Deposits Borrowin Bank Capital $100 $10 $10 The return on assets (ROA) for Bank A: The return on equity (ROE) for Bank A: The leverage ratio for Bank A: 12 15 percent 18 percent b. Bank B has net profit after taxes of $0.9 million and the following balance sheet: Bank Balance Sheet (in millions) Assets Liabilities Reserves Loans Securities $7.5 $55.0 $23.5 Deposits Borrowin Bank Capital $75.0 $3.0 $8.0 Instructions: Enter your responses rounded to two decimal places The return on assets (ROA) for Bank B percent The return on equity (ROE) for Bank B: percent The leverage ratio for Bank B: Prev1 of 1 Score answer >
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started