The Leverage Ratio Is the Ratio of a Bank's

question 19

Multiple Choice

The leverage ratio is the ratio of a bank's

• A)assets divided by its liabilities.
• B)income divided by its assets.
• C)capital divided by its total assets.
• D)capital divided by its total liabilities.

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Definitions:

Book Value

The value of a company or asset according to its financial statements, calculated as total assets minus intangible assets (like patents) and liabilities.

Trademark

A recognizable sign, design, or expression which identifies products or services of a particular source from those of others.

Fair Value

The cost at which a property is exchanged in a structured deal between parties in the market on the date of evaluation.

Long-Term Liabilities

Debts or obligations that are due after a period of one year or more.