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Question: Q.1. How are the balance sheets and income statements of finance companies, insurers, and securities firms similar to those of banks, and in what ways are they different? What might explain the differences you observe? Points-5 Q.2. Depositor’s Savings association has a ratio of equity capital to total assets of 7.5%. In contrast, Newton Savings reports an equity capital-to-asset ratio of 6%. What is the value of the equity multiplier for each of these institutions? Suppose that both institutions have an ROA of 0.85%. What must each institution’s return on equity capital be? What do your calculations tell you about the benefits of having as little equity capital as regulations or the marketplace will allow? Points-5
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المملكة العربية السعودية
وزارة التعليم
الجامعة السعودية اإللكترونية
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
FIN401 (1st Term 2023-2024)
Deadline: 28/10/2023 @ 23:59
Course Name: Banks Management
Student’s Name:
Course Code: FIN401
Student’s ID Number:
Semester: I
CRN:
Academic Year: 2023-24 1st Term
For Instructor’s Use only
Instructor’s Name: Dr Umme hani
Students’ Grade:
/ 10
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
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This assignment is an individual assignment.
The Assignment must be submitted only in WORD format via allocated folder.
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Assignments submitted through email will not be accepted.
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Students are advised to make their work clear and well presented; marks may be
reduced for poor presentation. This includes filling your information on the cover
page.
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Students must mention question number clearly in their answer.
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Late submission will NOT be accepted.
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Avoid plagiarism, the work should be in your own words, copying from students
or other resources without proper referencing will result in ZERO marks. No
exceptions.
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All answered must be typed using Times New Roman (size 12, double-spaced)
font. No pictures containing text will be accepted and will be considered
plagiarism).
Submissions without this cover page will NOT be accepted.
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
المملكة العربية السعودية
وزارة التعليم
الجامعة السعودية اإللكترونية
College of Administrative and Financial Sciences
Assignment questions: Total grade – 10 points
Question:
Q.1. How are the balance sheets and income statements of finance companies,
insurers, and securities firms similar to those of banks, and in what ways are they
different? What might explain the differences you observe? Points-5
Q.2. Depositor’s Savings association has a ratio of equity capital to total assets of
7.5%. In contrast, Newton Savings reports an equity capital-to-asset ratio of 6%.
What is the value of the equity multiplier for each of these institutions? Suppose that
both institutions have an ROA of 0.85%. What must each institution’s return on
equity capital be? What do your calculations tell you about the benefits of having as
little equity capital as regulations or the marketplace will allow? Points-5
Answers:
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