Suppose a bank has assets of $500 million and capital of $100 million. Its return on assets is -3%. What is its leverage ratio? What is its return on equity?
What will be an ideal response?
Its leverage ratio is bank capital/bank assets or $100 million/$500 million = 0.20. Its return on equity is its return on assets × bank assets/bank capital = -3% × (1/0,2 ) = -15%.
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The Grangers were the first farm organization of importance and are noted for
a. encouraging the federal government to re-issue "greenbacks.". b. establishing cooperatives that sold farm and consumer goods to their members. c. refusing to sell grain to foreign countries. d. forming a cartel that set upper limits on members' output of basic farm products. e. All of the above.
Suppose that there is an increase in expected future disposable income and simultaneously an increase in the expected profitability of investment
As a result, the equilibrium real interest rate ________ and the equilibrium quantity of loanable funds ________. A) rises; decreases B) falls; might increase, decrease, or not change C) rises; might increase, decrease, or not change D) rises; increases E) falls; increases
Real estate suitable for condominium development is also suitable for single-family home development. Therefore, a rise in the price of condominiums relative to single-family homes tends to
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Typically, perfect competitors advertise their specific goods
Indicate whether the statement is true or false