Which of the following is not a characteristic of a typical commercial bank? A) Most banks own few fixed assets. B) Most banks have a high degree of operating leverage. C) Most banks have few fixed costs. D) Many bank liabilities are payable on demand. E) Banks generally operate with less equity capital than non-financial firms.

Question

Quizplus · Accepted Answer

A high degree of operating leverage means that a large portion of a bank's expenses are fixed costs, which is not typically true for commercial banks. Most banks have few fixed costs and own few fixed assets, but they do operate with significant amounts of equity capital and have liabilities that are payable on demand.

Which of the Following Is not a Characteristic of a Typical