Which of the following is true?The leverage ratio is 50 meaning that for every $1 in capital the bank has $50 in assets. The leverage ratio is 45 meaning that for every $200 of capital the bank has $45 in deposits. The leverage ratio is 50 meaning that for every $200 of capital the bank has $50 in assets. The leverage ratio is 45 meaning that for every $1 of capital the bank has $45 in deposits. **First National Bank Balance Sheet Overview**This balance sheet provides a snapshot of the financial standing at First National Bank, detailing its assets, liabilities, and owners' equity.**Assets:**- **Reserves:** $1,200- **Loans:** $8,000- **Short-term Securities:** $800**Liabilities and Owners' Equity:**- **Deposits:** $9,000- **Debt:** $800- **Capital (Owners' Equity):** $200**Explanation:**The balance sheet is divided into two main sections:1. **Assets:** Represents the resources owned by the bank, which include: - **Reserves:** Cash or equivalent assets that the bank holds to meet withdrawal demands. - **Loans:** Amounts lent to customers, expected to be repaid with interest. - **Short-term Securities:** Investment in securities that are expected to be liquidated within a short period.2. **Liabilities and Owners' Equity:** Represents the obligations of the bank and the residual interest in its assets: - **Deposits:** Funds deposited by customers, constituting the primary liability of the bank. - **Debt:** The bank's borrowings, excluding customer deposits. - **Capital (Owners' Equity):** The owners' claim after all liabilities have been settled, indicating the net worth of the bank.The balance sheet is a crucial tool for assessing the bank's financial health, guiding stakeholders in evaluating profitability and risk.

Total asset =Reserves + Loans + Short term securities => Total asset = $1200 + $8000 + $800 => Total asset = $10,000 and Capital = $200 ------------------ Leverage ratio = (Total asset / Capital) => Leverage ratio = ($10,000 / $200) => Leverage ratio = 50 It means that for every $1 in the capital the bank has $50 in assets. Answer: Option (A) i.e., The leverage ratio is 50 meaning that for every $1 in the capital the bank has $50 in assets