If a bank has a leverage ratio of 0.1 and a return on assets of 2%, what is its return on equity? A. 0.2% B. 2.1% C. 5% D. 20%
Return on equity can be found by using the formula:
=Return on assets / leverage ratio
=2%/0.1
=20%
Answer is D. 20%
If a bank has a leverage ratio of 0.1 and a return on assets of 2%,...
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