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Set a simple bank balance sheet and briefly explain the meanings of the terms leverage ratio and insolvency. If the interest that the bank pays
Set a simple bank balance sheet and briefly explain the meanings of the terms leverage ratio and insolvency. If the interest that the bank pays for its liabilities is lower than the interest earned on its assets, discuss whether "A higher leverage ratio implies a higher expected profit rate, but also implies a higher risk of insolvency". pt
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