Which of the Following Would Not Be Part of Primary

question 119

Multiple Choice

Which of the following would not be part of primary bank capital?

• A) bank premises
• B) common stock of the bank
• C) loan loss reserves
• D) perpetual preferred stock

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Definitions:

Accounting Return

A measure of profitability in relation to various accounting measures, such as net income or assets.

Average Accounting Return (AAR)

An investment’s average net income divided by its average book value.

Return on Equity (ROE)

A measure of financial performance calculated by dividing net income by shareholders' equity, reflecting the profitability relative to the equity.

Return on Assets (ROA)

A financial ratio indicating how profitable a company is relative to its total assets, calculated as net income divided by total assets.