A Bank Has a Return on Assets of 2 Percent

question 66

Multiple Choice

A bank has a return on assets of 2 percent, $40 million in assets, and $4 million in equity. What is the return on equity?

• A)10 percent
• B).2 percent
• C)2 percent
• D)20 percent
• E)None of these are correct.

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Definitions:

Straight-Line Method

A way of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Resale Value

The projected value at which an asset can be disposed of after its life of usability has ended.

Office Furniture

Items and fixtures used in an office setting to support various work activities and tasks, such as desks, chairs, and file cabinets.

Resale Value

The estimated market value of an asset if sold again in the future, often considered for vehicles, electronics, and properties.