interview question, why are banks an example of levered
Interview question I received:
Why is it more advantageous for banks to be highly levered than companies in other industries?
Any thoughts?
Interview question I received:
Why is it more advantageous for banks to be highly levered than companies in other industries?
Any thoughts?
Career Resources
The reason banks have to be so highly levered is because return on assets is so small that the leverage is the only way to get a respectable return on equity.
It's also much harder to define leverage and debt when it comes to banks, so its convoluted question to begin with...
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