1. If a bank is falling short of meeting its capital requirements by $1 million, what three things can it do to rectify the situation? 2. If a bank doubles the amount of its capital and ROA stays...

1. If a bank is falling short of meeting its capital requirements by $1 million, what three things can it do to rectify the situation?

2. If a bank doubles the amount of its capital and ROA stays constant, what will happen to ROE ?

3. What does the net interest margin measure, and why is it important to bank managers?

4. Which components of operating expenses experience the greatest fluctuations? Why?

5. Can a financial institution keep borrowers from engaging in risky activities if there are no restrictive  covenants written into the loan agreement?