A bank has a ROE of 14 percent and a ROA of 2 percent.What is this bank's equity capital to total assets ratio?

Name: A bank has a ROE of 14 percent and a ROA of 2 percent.What is this bank's equity capital to total assets ratio?
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Quizplus · Accepted Answer

The equity capital to total assets ratio can be calculated using the formula: ROE = ROA * (Total Assets/Equity). Rearranging gives Equity/Total Assets = ROA/ROE = 2%/14% = 0.1429 or 14.29%.

A Bank Has a ROE of 14 Percent and a ROA