The ratio of a bank's interest income from its loans and security investments less interest expenses on debt issued,divided by total earning assets measures a bank's:
A)net operating margin.
B)net return before special transactions.
C)net interest margin.
D)return on assets.
E)None of the options is correct

Question

Quizplus · Accepted Answer

The given ratio is typically known as net interest margin (NIM) which measures a bank's profitability based on its interest income and expenses relative to its earning assets. Thus, the correct option is C - net interest margin.

The Ratio of a Bank's Interest Income from Its Loans