Oriole Savings Association has a ratio of equity capital to total assets of 9 percent. In contrast, Cardinal Savings reports an equity-capital-to-asset ratio of 7 percent. What is the value of the equity multiplier for each of these institutions? Suppose that both institutions have an ROA of 0.67 percent. What must each institution’s return on equity capital be? What do your calculations tell you about the benefits of having as little equity capital as regulations or the marketplace will allow?
Answer to relevant QuestionsThe latest report of condition and income and expense statement for Smiling Merchants National Bank are as shown in the following tables:Smiling Merchants National Bank (complete)Income and Expense Statement (Report of ...Conway County National Bank presents us with these figures for the year just concluded. Please determine the net profit margin, equity multiplier, asset utilization ratio, and ROE.Net income........... $ 30.00Total ...What factors have motivated financial institutions to develop funds management techniques in recent years?How do you measure the dollar interest-sensitive gap? The relative interest-sensitive gap? What is the interest sensitivity ratio?What is duration?
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