If the Bank Expects Its Roa to Be

For banks that have insufficient capital, which of the following is not a typical operating strategy to achieve capital adequacy? A)Limit asset growth B)Shrink the bank C)Increase the dollar amount of commercial loans outstanding D)Shift more bank assets into lower risk categories. E)Reprice assets to reflect greater equity support

Which of the following is true regarding subordinated debt? A)Subordinated debt claims come before the claims of depositors. B)Principal payments are not mandatory. C)Transaction costs on issuing new debt are lower than when issuing new equity. D)Interest payments on subordinated debt are tax-deductible. E)New subordinated debt dilutes existing shareholder equity.