Management Questions Answers And Examples

Answer The growth rate of the company in this case will be high as the company is generating cash as the company has high deposits, so I would be willing to buy the stock of the particular bank. 2. Bank managers should always seek the highest return possible on their assets. Is this statement true, false, or uncertain Explain your answer Answer Yes, the bank manager should focus on seeking highest return on their assets as the efficiency of the assets used by the banks affect the valuation of bank in the market. So, if the assets are effectively used then the banks will have higher returns in the market. 3. Why do equity holders care more about ROE than about ROA Answer A basic measure of the profitability of the bank is return on assets which helps in indicating that how well is bank able to generate profits through the use of its assets. ROA provides wide information about the profitability of the firm but the shareholders are more concerned about the Return on equity. As it brings into picture the return that the shareholders are earning on the amount of investment made by them in the bank. ROE