What is the equity multiplier for a bank where equity is equal to 8% of total assets?
A) 1.08
B) 8.00
C) 0.92
D) 12.5
E) 1.25

Name: What is the equity multiplier for a bank where equity is equal to 8% of total assets? A) 1.08 B) 8.00 C) 0.92 D) 12.5 E) 1.25
Brand: Quizplus
Rating: 4.8 (32 reviews)

Question

Quizplus · Accepted Answer

The equity multiplier is calculated as the ratio of total assets to total equity. If equity is 8% of total assets, then the equity multiplier is 1 / 0.08 = 12.5.

What Is the Equity Multiplier for a Bank Where Equity