Question: (10) 8. What is leverage? What is the leverage ratio implied by the attached balance sheet? Explain the impact of leverage on bank capital profitability

(10) 8. What is leverage? What is the leverage ratio implied by the attached balance sheet? Explain the impact of leverage on bank capital profitability during economic expansions and in recessions. What is the connection between leverage and too big to fail?" Happy Bank Assets Liabilities Reserves Loans $100 Deposits $900 Bank Capital $800 $200

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