A high equity multiplier can increase ROE and the growth rate of the bank as long as ROA is:
A) increasing
B) decreasing
C) positive
D) negative

Question

Quizplus · Accepted Answer

A high equity multiplier can increase Return on Equity (ROE) and the growth rate of the bank as long as Return on Assets (ROA) is positive. This is because a positive ROA indicates that the bank is generating profits from its assets, and leveraging those assets through a high equity multiplier can amplify the ROE.

A High Equity Multiplier Can Increase ROE and the Growth