If a bank has $150 million in assets and a net worth of $20 million, its asset-to-equity ratio is:

Name: If a bank has $150 million in assets and a net worth of $20 million, its asset-to-equity ratio is:
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Question

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The asset-to-equity ratio is calculated by dividing the bank's total assets ($150 million) by its net worth ($20 million).

Asset-to-equity ratio = Total assets / Net worth

= $150 million / $20 million

= 7.5 to 1

Therefore, the asset-to-equity ratio is 7.5 to 1, and the correct answer is (B).

If a Bank Has $150 Million in Assets and a Net