If a bank has more purchased funds than the average bank,you would not be surprised to see a higher than average ____________________ ratio.

Question

Quizplus · Accepted Answer

If a bank has more purchased funds than the average bank, it means the bank is utilizing more external funds to finance its operations. This would lead to a higher than average interest expense ratio. The interest expense ratio measures the amount of interest expense that a bank incurs as a percentage of its total assets, and thus, it is a good indicator of how much a bank is paying for funding its operations. A higher interest expense ratio would indicate that the bank is paying a higher cost of funds than the average bank, which could impact its profitability. Hence, the best choice is D - interest expense.

If a Bank Has More Purchased Funds Than the Average