What are the principal components of ROE, and what does each of these components measure?
Answer to relevant QuestionsSuppose a bank has an ROA of 0.80 percent and an equity multiplier of 12X. What is its ROE? Suppose this bank's ROA falls to 0.60 percent. What size equity multiplier must it have to hold its ROE unchanged?What items on a bank's balance sheet and income statement can be used to measure its risk exposure? To what other financial institutions do these risk measures seem to apply?The 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 ...Using this information for Eagle Bank and Trust Company (all figures in millions), calculate the bank's net interest margin, noninterest margin, and ROA.Interest income........... $ 75Interest expense........... ...Can you explain the concept of gap management?
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