d) 3. A) Provide the methods used to compute a bank's ROA and ROE. (10 pts) bl boblongo s2rs Deup gnlvello s ROE= ROA= B) If a bank reduces the amount of its capital in half and ROA stays constant, using the appropriate formula, explain what will happen to ROE C) If you are a banker and expect interest rates to rise in the future, would you prefer to make short-term loans or long-term loans? Explain. 4 Explain and illustrate graphically the effect of an increase in expected inflation on interest rates? (Hint: interest rates are determined in the bond market) (5 pts) Tnad dod o n