Which of the following would be the best example of a ratio used to examine the return on one of a bank's assets?
A)Demand deposits/Total assets
B)Interest on time deposits/Total time deposits
C)Interest on real estate loans/Total real estate loans
D)Interest sensitive assets/Interest sensitive liabilities
E)Interest on CDs/Total CDs issued

Question

Quizplus · Accepted Answer

The ratio of interest on real estate loans to total real estate loans would give an indication of the return on one of the bank's assets, i.e., its real estate loan portfolio. This ratio would help the bank decide whether it is earning sufficient interest income on its real estate loans or not. The other options do not directly relate to examining the return on one of the bank's assets.

Which of the Following Would Be the Best Example of a Ratio