If a Bank's Return on Equity Remains Constant, but the Ratio

question 60

Multiple Choice

If a bank's return on equity remains constant, but the ratio of bank assets to bank capital decreases:

• A) the bank's return on assets must have increased.
• B) the bank's return on assets must have decreased.
• C) the bank's assets and capital must have increased by the same percent.
• D) the bank must be unprofitable.

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Definitions:

Impulsive

Acting on or inclined to act on one's impulses rather than careful thought, often with disregard to the consequences.

Five-Factor Model

A model that describes human personality through five broad domains: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Conscientiousness

A personality trait characterized by carefulness, diligence, and the desire to do a task well.

Punctual

The quality of being on time to appointments or obligations, reflecting a respect for other people's time as well as one's own.