Question : ___________ is a measure of the efficiency of banks in managing their assets.
Option 1: Return on assets (ROA)
Option 2: Return on equity (ROE)
Option 3: Liquidity ratio
Option 4: Capital adequacy ratio (CAR)
Correct Answer: Return on assets (ROA)
Solution : The correct answer is (a) Return on assets (ROA).
Return on assets is a financial ratio that measures the profitability and efficiency of a bank in managing its assets. It indicates how effectively a bank generates profits from its total assets.
ROA is calculated by dividing the net income of the bank by its average total assets. The ratio represents the percentage of net income earned for each unit of assets employed by the bank. A higher ROA indicates better efficiency and profitability in utilizing the bank's assets to generate earnings.
Question : Which type of ratio states EBIT/Total assets?
Question : ______________shows the relationship of profit (profit before interest and tax) with Capital Employed.
Question : The commercial banks of India have to maintain a minimum percentage of cash, gold and other securities before lending loans to their customers. This is called the ____________.
Question : Rate of interest is determined by
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