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 ROA 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)