Everything Else Equal, If the Ratio of Bank Assets to Bank

question 36

Multiple Choice

Everything else equal, if the ratio of bank assets to bank capital increases, the bank's return on equity should:

• A) remain constant.
• B) decrease.
• C) increase.
• D) cannot be determined from the information provided.

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Definitions:

Level of Availability

The degree to which a system, service, or product is operable and accessible when required for use.

Inventory Cost

The total expense associated with purchasing and maintaining a business's inventory, including procurement, storage, and management costs.

Supply Chain Revenues

The total income generated from the sale of goods and services throughout the entire supply chain.

Optimal Level

The most favorable point or condition that yields the best outcome for a specific objective, such as profit maximization or cost minimization.