A Bank's Return on Assets (ROA) Is Calculated by Dividing

question 37

Multiple Choice

A bank's Return on Assets (ROA) is calculated by dividing:

• A)the bank's assets by its net worth.
• B)the bank's net profits after taxes by its assets.
• C)the bank's net worth by its assets.
• D)the bank's assets less its net profit after taxes by its net worth.

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Definitions:

Exempt

Freed or relieved from a duty, requirement, or liability to which others are subject.

Security Interest

A legal claim or encumbrance on property or assets, securing the payment of a debt or performance of some other obligation.

Collateral

Assets pledged by a borrower to secure a loan or credit, which can be seized by the lender if the borrower fails to repay.

Perfected Interest

A legal claim or lien that has been formally established to secure priority over other claims concerning the same asset or property.