If a bank increases its assets by adding one dollar


Discussion:

If a bank increases its assets by adding one dollar to capital then

A. leverage stays constant since neither of these accounts are related to leverage.

B. leverage increases.

C. leverage stays constant as both are raised an equal amount.

D. leverage decreases.

E. The answer can not be determined from the information in the question.

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Microeconomics: If a bank increases its assets by adding one dollar
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