ROE for a Bank Is Calculated By

question 88

Multiple Choice

ROE for a bank is calculated by:

• A)dividing net after-tax income by total equity capital.
• B)dividing total operating revenue less operating expenses by total assets.
• C)dividing net pre-tax income by total equity capital.
• D)noninterest income less noninterest expenses divided by total earning assets.
• E)None of the options is correct.

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Definitions:

Final Distribution

The process of allocating the last portion of assets or earnings among shareholders, partners, or other stakeholders after all obligations have been met.

Cash

Liquid assets held in the form of currency or bank accounts that can be readily used for transactions.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to produce goods or services.

Partners' Investments

The capital contributed by partners into a partnership for its operation and growth.