In order to decrease the capital/asset ratio, a bank can do all of the below EXCEPT:

Question 1 options:

	Borrow more and use the fund to increase loans
	Give out less loans and use proceeds to reduce borrowing
	Increase dividend payments
	Buy back equity

Net profit after taxes per dollar of assets is a basic measure of bank profitability called

Question 2 options:

A)	return on capital.

B)	return on assets.

C)	return on equity.

D)	return on investment.

A bank has borrowed $370 and has received $400 worth of deposits. The bank has given out loans for $710 and has reserves of 120, and the bank holds no securities or any other assets. The bank capital is:

Question 3 options:

	$30
	$60
	$770
	$830

Net profit after taxes per dollar of equity capital is a basic measure of bank profitability called

Question 4 options:

A)	return on assets.

B)	return on investment.

C)	return on capital.

D)	return on equity.

A bank is insolvent (and therefore bankrupt) when

Question 5 options:

A)	its capital exceeds its liabilities.

B)	its liabilities exceed its assets.

C)	its assets increase in value.

D)	its assets exceed its liabilities.