Which of the following scenarios would result in a decrease in a bank’s capital ratio? Check all that apply.
A bank purchased $4 million worth of stocks one year ago and sells them for $5 million today but doesn’t distribute the earnings as dividends to its shareholders.
A bank that has not been performing strongly engages in a secondary stock offering in an attempt to raise $5 million.
A bank sells off many of its assets, such as mortgage-backed securities, mortgage loans, and real estate development loans.
A bank purchased $4 million worth of stocks one year ago and sells them for $4 million today.