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Suppose Bank A earns 2 percent on assets (ROA), while Bank B earns 2.5 percent (ROA). Estimate the return on equity (ROE) and equity multiplier

Suppose Bank A earns 2 percent on assets (ROA), while Bank B earns 2.5 percent (ROA).

Estimate the return on equity (ROE) and equity multiplier (EM) if Bank A's equity to asset ratio is 5%, and Bank B's equity ratio is 12%.

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