Which of the following is true regarding a bank\'s capital-asset ratio? (a)High
ID: 1178047 • Letter: W
Question
Which of the following is true regarding a bank's capital-asset ratio?
(a)High capital-asset ratios are desirable as they offer a buffer against non-performing bank loans.
(b)
The ratio is defined as the excess of bank liabilities over assets.
(c)
A bank can raise the ratio by reducing the number of stock shares it has outstanding.
(d)
The ratio gives an overall picture of the quality of business loans the bank is making.
(a)High capital-asset ratios are desirable as they offer a buffer against non-performing bank loans.
(b)
The ratio is defined as the excess of bank liabilities over assets.
(c)
A bank can raise the ratio by reducing the number of stock shares it has outstanding.
(d)
The ratio gives an overall picture of the quality of business loans the bank is making.
Explanation / Answer
A bank can raise the ratio by reducing the number of stock shares it has outstanding.
A bank can raise the ratio by reducing the number of stock shares it has outstanding.
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