Using suitable ratios, analyse the information provided and recommend what action should be taken.

(12 marks)

(b)

Explain what is meant by the 'risk/return trade-off' and its relevance to the bank in assessing the request for

further loan finance.

(5 marks)

(c)

A bank is an example of a financial intermediary. Explain the role of financial intermediaries and their

usefulness to the private investor.

(8 marks)

(Total = 25 marks)