How has the performance of the commercial banking industry changed in the last twenty years?
Answer to relevant QuestionsWho are the major regulators of commercial banks? Which banks does each agency regulate?How does one distinguish between an off-balance-sheet asset and an off-balance-sheet liability?How does the asset utilization ratio for a bank compare to that of a retail company? How do the equity multipliers compare?A bank has an ROE of 10 percent. The industry average ROE is 15 percent. How can ratio analysis help the firm’s managers identify the reasons for this difference? A bank is considering two securities: a 30-year Treasury bond yielding 7 percent and a 30-year municipal bond yielding 5 percent. If the bank’s tax rate is 30 percent, which bond offers the higher tax equivalent yield?
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