If a Bank's Return on Equity Remains Constant, but the Ratio

question 53

Multiple Choice

If a bank's return on equity remains constant, but the ratio of bank assets to bank capital increases:

• A) the bank's return on assets must have increased.
• B) the bank's return on assets must have decreased.
• C) the bank's assets and capital must have increased by the same percentage.
• D) the bank must be unprofitable.

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Definitions:

Equal Credit Opportunity Act

A U.S. federal law that prohibits discrimination in granting credit to consumers based on race, color, religion, national origin, sex, marital status, age, or because they receive public assistance.

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An application for borrowing money or obtaining goods or services with the promise to pay back at a later time.

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The specified period within certain agreements or regulations where parties are required to notify others about certain conditions, changes, or events within a set timeframe.