Banks should strive to raise their level of equity as high as possible.

Name: Banks should strive to raise their level of equity as high as possible.
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Question

Quizplus · Accepted Answer

While banks need sufficient equity to absorb losses and meet regulatory requirements, excessively high levels of equity can reduce return on equity (ROE) and may not be cost-efficient, as equity is often a more expensive form of financing compared to debt.

Banks Should Strive to Raise Their Level of Equity as High