Consider the following two FIs: Company A has $500 million in total assets and total costs equal to $200 million. Company B has $60 million in total assets and total costs equal to $24 million.
What are average costs for each FI?

Question

Quizplus · Accepted Answer

Average cost is calculated as total costs divided by total assets. Therefore, for Company A, average cost = $200 million / $500 million = 0.40. For Company B, average cost = $24 million / $60 million = 0.40. Therefore, the answer is D, 0.40 for both A and B.

Consider the Following Two FIs: Company a Has $500 Million