The method of calculating costs of bank funds by summing the average cost of each source of funds times the proportion of total funds raised from each respective source of funds is called:
A) weighted average costs
B) average costs
C) marginal costs
D) total costs

Question

Quizplus · Accepted Answer

The method described is known as weighted average costs, which specifically applies to calculating the costs of bank funds by considering the average cost of each funding source and its proportion in the total funding mix.

The Method of Calculating Costs of Bank Funds by Summing