A bank's return on equity (ROE) is calculated by:
A) dividing the bank's net profit after taxes by the bank's capital.
B) dividing the banks liabilities by the bank's capital.
C) taking the bank's assets plus the net profit after taxes and dividing this sum by the bank's capital.
D) dividing the bank's net profit after taxes by the sum of the bank's assets and its liabilities.
Correct Answer:
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