Everything else equal, if the ratio of bank assets to bank capital increases, the bank's return on equity should:

Name: Everything else equal, if the ratio of bank assets to bank capital increases, the bank's return on equity should:
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An increase in the ratio of bank assets to bank capital indicates higher leverage, which typically leads to an increase in return on equity, assuming the assets generate returns greater than the cost of capital.

Everything Else Equal, If the Ratio of Bank Assets to Bank