1. Assume a basic bank as illustrated in

   the table, with bank equity of $50.

   RL = interest rate charged on a loan

   RD = interest rate charged on a deposit

   RG = interest rate on government bonds, which is fixed at 4 percent

   Assets	Liabilities
   Loans	Deposits
   Gov't Bonds	Equity

   Your bank is choosing between two alternatives (decision sets A and B), with the following

   marketing estimates:

   Decision Set A

   Choosing RL = 8 percent, then customers will demand $150 of loans.

   Choosing RD = 3 percent, then customers will supply $145 of deposits.

   Decision Set B

   Choosing RL = 9 percent, then customers will demand $120 of loans.

   Choosing RD = 5 percent, then customers will supply $120 of deposits.

   What is your bank's ROE under decision set B? What is your bank's ROA under decision set B? What is your bank's ROA under decision set A? What is your bank's ROE under decision set A? (State your answer as percent and round to two decimal places; i.e. four and a quarter percent is 4.25)