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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When the ratio of bank assets to bank capital increases, it means the bank is using more leverage. Higher leverage can amplify returns on equity as long as the return on assets exceeds the cost of borrowing.

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