The ratio that equals total interest income divided by total earning assets less total interest expense divided by total interest-bearing liabilities is known as the:
A)earnings base.
B)earnings spread.
C)net income margin.
D)net return prior to special transactions.
E)None of the options is correct

Question

Quizplus · Accepted Answer

The ratio that equals total interest income divided by total earning assets less total interest expense divided by total interest-bearing liabilities is known as the earnings spread. This is a measure of the profitability of a bank's assets and liabilities. It shows the net interest margin earned on the earning assets and how much of it is absorbed by the interest expense on the liabilities. This ratio is commonly used by banks to monitor and manage their interest rate risk and profitability.

The Ratio That Equals Total Interest Income Divided by Total