QUESTION 2
Morehead Bank has the following financial statements. Answer Questions 2 - 13.
Balance Sheet
Income Statement
Cash
$100
Interest Income
$400
Securities Investment
600
Interest Expenses
150
Net Loans
1,200
Non-Interest Income
50
Net Premises and Equipment
300
Non-Interest Expenses
100
Total Assets
$2,200
Provision for Loan Losses
60
Pre Tax Net Operating Income
?
Deposits
$1,100
Securities Losses
40
Non-Deposit Borrowings
800
Taxes
45
Equity Capital
300
Net Income
?
Total Liabilities and Equity
$2,200
What is the bank's ROE?
a. 18.33%
b. 12.22%
c. 20.45%
d. 7.33%
QUESTION 3
What is the bank's ROA?
a. 2.5%
b. 12.2%
c. 7.4%
d. 18.3%