A bank has book value of assets equal to $800 million and market value of assets equal to $1,100 million. The bank has book value of liabilities of $700 million and market value of liabilities equal to $850 million. The bank's market-to-book ratio is

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The market-to-book ratio is calculated by dividing the market value of assets by the book value of assets. In this case, the market value of assets is $1,100 million and the book value of assets is $800 million, so the market-to-book ratio is 1,100 / 800 = 2.5.

A Bank Has Book Value of Assets Equal to $800