A Bank Has a Net Profit Margin of 5

question 108

Multiple Choice

A bank has a net profit margin of 5.25 percent.It has an asset utilization ratio of 45 percent and has an equity multiplier of 12.It retains 40 percent of its earnings each year.What is this bank's internal capital growth rate?

• A)28.35 percent
• B)2.36 percent
• C)11.34 percent
• D)4.80 percent
• E)None of the options is correct.

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Definitions:

Warrant

An order authorizing a payment of money by another person to a third person. Also, an option to purchase a security. As a verb, the word means to defend; to guarantee; to enter into an obligation of warranty.

Equal Protection Clause

A provision in the Fourteenth Amendment of the U.S. Constitution prohibiting states from denying any person within its jurisdiction the equal protection of the laws.

Discriminate

To treat someone differently or less favorably on the basis of certain characteristics, such as race, age, or gender, often in a way that is unfair or illegal.

Ex Post Facto

A law that retroactively changes the legal consequences or status of actions that were committed before the enactment of the law.