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Consider a bank with the following balance sheet. You read online that the banks return on assets (ROA) was 1 percent. What were the banks
- Consider a bank with the following balance sheet. You read online that the banks return on assets (ROA) was 1 percent. What were the banks after-tax profits[Complete solution and calculations need to be shown to get the full points]?
Bank Balance Sheet | |||
(in thousands) | |||
Assets | Liabilities | ||
Reserves | $200
| Deposits | $2,000 |
Loans | $950 | Borrowing | $0
|
Securities | $950 | Bank Capital | $100 |
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