For a Given Return on Assets,the Lower the Bank Capital

question 76

Multiple Choice

For a given return on assets,the lower the bank capital is,

• A) the lower the return for the owners of the bank will be.
• B) the higher the return for the owners of the bank will be.
• C) the lower the credit risk for the owners of the bank will be.
• D) both A and C of the above will happen.

---

Definitions:

Taxpayers' Burden

The financial obligation imposed on taxpaying citizens by government spending and debt, often reflected in the taxes they must pay.

Supply and Demand

Supply and Demand is a fundamental economic model that describes how prices and quantities are determined in a market system.

Public Aid

Financial assistance or support provided by government bodies to individuals, households, or organizations in need.

Imperfect Markets

Markets that do not meet the strict criteria of perfect competition, often featuring barriers to entry, information asymmetry, or monopoly power.