If a Bank Has a Leverage Ratio of 0

question 43

Multiple Choice

If a bank has a leverage ratio of 0.1 and a return on capital of 2%, what is its return on equity?

• A)0)2%
• B)2)1%
• C)5%
• D)20%

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Definitions:

Latin America

A region in the Western Hemisphere, south of the United States, encompassing countries in Central and South America as well as the Caribbean, distinguished by Romance languages and cultural ties.

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A New Deal agency created in 1937 to combat rural poverty during the Great Depression in the United States.

Tenant Farmers

Individuals who rent land to farm from a landlord.

Purchase Land

Buying property or land involves acquiring ownership of a piece of real estate, usually through financial transactions and legal documentation.