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In: Economics

In March 2020, a bank saw a 6% drop in assets, a 30% drop in capital,...

In March 2020, a bank saw a 6% drop in assets, a 30% drop in capital, but no change in liabilities.


    (a) How much was the bank's leverage ratio (defined as the equity multiplier) at the beginning of March 2020?
    (b) How much was the bank's leverage ratio (defined as the equity multiplier) at the end of March 2020?
    (c) In April 2020, the bank's assets decreased by 2%, while the bank's liabilities remained unchanged. What was the percentage change in the bank's capital in April 2020?

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