Leverage Is Essential to a Bank's Profitability, but It Also

question 5

True/False

Leverage is essential to a bank's profitability, but it also increases risk.

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Definitions:

Act of Omission

A failure to perform an act or duty that one is obligated to do by law or promise.

Tax Return

A form filed with a government body, reporting income, expenses, and other pertinent tax information, used to calculate tax liability.

Mens Rea

A legal principle referring to the state of mind of a person who commits a crime, indicating intent or knowledge of wrongfulness.

Actus Reus

The physical act of committing a crime, as opposed to the mental intent (mens rea) to commit the act.