A bank's return on assets (ROA)could be lower than desired because of all of the following EXCEPT
A)the bank has experienced heavy loan losses.
B)the bank was locked into fixed-rate loans prior to a rise in market interest rates.
C)the bank is receiving a relatively small amount of noninterest income.
D)the bank has reduced its noninterest expenses.

Question

Quizplus · Accepted Answer

Reducing noninterest expenses would typically improve a bank's return on assets (ROA) by lowering its operating costs, not lower it. The other options (A, B, C) could all negatively impact the bank's ROA.

A Bank's Return on Assets (ROA)could Be Lower Than Desired