The leverage ratio is calculated as Group of answer choices assets minus liabilities. assets divided by bank capital. the reciprocal of the required reserve ratio. the required reserve ratio multiplied by bank capital.

Assets divided by bank capital

Explanation:

The Leverage ratio is a tool used by banks, certain financial institutions and Government regulators to make sure that Banks have adequate capital in relation to the amount of assets that they are carrying.

It works by Dividing a Bank's easily liquidated Assets by it's Capital and as such shows the leverage level in terms of how much of the bank's assets are funded by Liabilities. This tool is very important in showing if the bank is Financially healthy or not.