Explain why do equity holders care more about roe

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1.If the president of a bank told you that it was run so well that it has never had to call in loans, sell securities, or borrow as a result of deposit outflow, would you be willing to buy stock in this ba nk, why or why not.

2.Bank managers should always seek the highest return possible on their assets. Is this statement true, false, or uncertain? Explain your answer

3. Explain why do equity holders care more about ROE than about ROA?

4. If a bank doubles the amount of its capital and ROA stays constant, what will happen to ROE?

Reference no: EM1353227

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