For a Given Return on Assets,the Lower Is Bank Capital

question 146

Multiple Choice

For a given return on assets,the lower is bank capital

• A)the lower is the return for the owners of the bank.
• B)the higher is the return for the owners of the bank.
• C)the lower is the credit risk for the owners of the bank.
• D)the lower the possibility of bank failure.

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Definitions:

Variable Selling

Costs that vary directly with the volume of sales, such as commissions and shipping charges.

Administrative Expense

Administrative expense includes overhead costs not directly tied to a specific project or production process, such as salaries of executive staff, office supplies, and utilities.

Direct Labor-Hours

The amount of time spent by workers directly involved in manufacturing a product or delivering a service.

Raw Materials

The basic substances in their natural, modified, or semi-processed states used as inputs for manufacturing processes.