onsider a bank with the following balance sheet: Assets-150   Liabilities-110   Capital-40   a) What is this bank’s leverage ratio? A. 0.27 B. 0.36 C. 2.75 D. 3.75 E. 13.63   b) Suppose that the bank’s assets earn 3% interest and the bank’s liabilities pay 2% interest, what is the bank’s expected profit per unit of capital? A. 0.01 or 1% B. 0.0336 or 3.36% C. 0.0575 or 5.75% D. 0.2667 or 26.67% E. 0.3636 or 36.36%

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