A Bank's Return on Assets (ROA)could Be Lower Than Desired

question 27

Multiple Choice

A bank's return on assets (ROA) could be lower than desired because of all of the following EXCEPT

• A)the bank has experienced heavy loan losses.
• B)the bank was locked into fixed-rate loans prior to a rise in market interest rates.
• C)the bank is receiving a relatively small amount of noninterest income.
• D)the bank has reduced its noninterest expenses.

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Definitions:

Imposter Rule

A rule which holds that if one party obtains a negotiable instrument by impersonating another party and endorses it with the impersonated party’s signature, the loss falls on the drawer of the instrument.

Drawer

In financial terms, the person who writes or issues a check, directing a bank to pay the stated amount from the drawer's account.

Discharged Liability

The release or elimination of a debtor's obligation to pay a debt, typically occurring through bankruptcy proceedings.

Imposter Rule

A legal principle in trademark law that prohibits the use of a mark or package that is deceptively similar to an established trademark, potentially misleading consumers.