Econ 121 Midterm Exam – II

Suppose that the Second National Bank has the following balance sheet (in million dollars) Assets: Reserves 5; Loans 40; Liabilities: Deposits 40; Bank Capital 5. a. If net profits of the First and Second National Banks are both $1 million dollars, then what are the return on asset (1 point) and the return on equity for each bank (1 point)? ................
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