What Is the Leverage Implied by the Bank Balance Sheet

question 11

Multiple Choice

What is the leverage implied by the bank balance sheet listed below?

• A)2-to-1
• B)7-to-1
• C)8-to-1
• D)10-to-1

---

Definitions:

Risk Behaviors

Actions that expose individuals to a significant risk of harm or loss, often scrutinized in health, finance, and safety studies.

Expected Payoff

The anticipated return or outcome from an investment or decision, taking into account all possible scenarios.

Utility Function

A mathematical representation of how different combinations of goods or services generate levels of happiness or satisfaction for an individual.

Probability

A measure of the likelihood of an event occurring, expressed as a number between 0 and 1.