Chapter 9, Problem 10Q

To determine

The impact on ROE if, bank doubles the amount of its capital and ROA is constant.

Concept Introduction:

Return on Equity is a financial ratio to determine the various changes that will be experienced by a bank when additional capital is introduced into the business environment or how the value of a company grow over the time.

Banks are financial institutions which deal in financial instruments such as cash or cash equivalents such as cheques, drafts etc. Banks are a vital part of a country’s economic growth and future aspirations of development.