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1.You purchase $100,000 worth of shares and hold them for a year. At the end of...

1.You purchase $100,000 worth of shares and hold them for a year. At the end of the year, the value of your portfolio of shares has increased to $110,000. Assuming a cost of debt of 5% and a leverage ratio of 10, what is your ROA and ROE?
2.A bank with a leverage ratio of 20 has a cost of liabilities of 3%pa and lends at an average interest rate of 5%pa. What are the bank's ROA and ROE?
3.Better Bank is required by APRA to maintain a capital adequacy ratio of at least 10.5%. Barker Bank has total assets of $195bn, total liabilities of $180bn, and risk weighted assets of $160bn. Is the Bank meeting its minimum capital adequacy ratio requirement? What is the bank's capital adequacy ratio?
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