The Willis Savings Bank is comparing the prevailing interest rate in the Fed Funds market with that of the negotiable CD market.It is making sure to include the noninterest costs,the deposit insurance costs,and the amount of money that will actually be available for new loans.Which factor that affects a bank's use of nondeposit sources of funds is the bank examining?
A)The relative cost of raising the funds
B)The length of time the funds will be required
C)The risk associated with each source of funds
D)The size of the bank
E)Regulations

Question

Quizplus · Accepted Answer

The bank is examining the relative cost of raising funds, which is a factor that affects a bank's use of nondeposit sources of funds.

The Willis Savings Bank Is Comparing the Prevailing Interest Rate