1. A firm has return on equity of 10%. The debt-equity ratio is 1.2 and the profit margin is 15%. What is the total asset turnover?
a. .5556 b. .3030 c. .0333 d. 2 e. Cannot be determined
2. A bank has a return on assets of 2 percent, $40 million in assets, and $4 million in equity. What is the return on equity?