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You are given the following financial statements for Meadows Bank. Balance Sheet Assets Liabilities (In millions of $) (In millions of $) Cash $900 Deposits
You are given the following financial statements for Meadows Bank. Balance Sheet Assets Liabilities (In millions of $) (In millions of $) Cash $900 Deposits Securities $1,900 Borrowing from other banks Loans $7,000 Borrowing from Central bank Buildings $1,100 Equity $10,800 $8,000 $500 $300 $2,000 $10,800 Income Statement (In millions of dollars) Interest income on loans Interest income on securities Noninterest income Interest expenses $500 $100 $90 $300 $150 $70 $80 Noninterest expenses Provision for loan loss Taxes Net Income $90 a) What is the return on equity (ROE) for Meadows Bank? Show your calculations. b) What is the equity multiplier (EM) for Meadows Bank? Show your calculations. c) What does the equity multiplier measure? d) What is the profit margin for Meadows Bank? Show your calculations. e) What does the profit margin measure
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