If a Bank's Ratio of Assets to Capital Is 25

question 144

Multiple Choice

If a bank's ratio of assets to capital is 25 and it's return on assets is -5%,what is its return on equity?

• A) -0.2%
• B) -5%
• C) -30%
• D) -125%

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Definitions:

Consecutive Years

A period of time consisting of sequential years immediately following one another without interruption.

Predicting

The action or process of making forecasts about future events or outcomes based on current or historical data.

Weak Form

The hypothesis that past stock prices and trading volume do not affect future stock prices, suggesting that technical analysis cannot predict future movements.

Efficient-Market Hypothesis

The theory that all available information is already reflected in stock prices, suggesting that it is impossible to consistently achieve higher returns than the overall market through expert stock selection or market timing.