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

question 30

Multiple Choice

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

• 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 percent
• D)The bank must be unprofitable

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Definitions:

Mutually Exclusive

Events that cannot occur at the same time, implying that the occurrence of one event excludes the occurrence of the other.

Events

Outcomes or occurrences that can be clearly defined, measured, and distinguished from other events in a probability context.

Outcomes

The possible results or consequences of an experiment, procedure, or situation.

Event

An outcome or a set of outcomes of a random experiment or phenomenon, which can be quantified for analysis in probability and statistics.