Investment securities plus ________ is equal to a bank's earning assets.

Question

Quizplus · Accepted Answer

Net loans and leases refer to the total amount of loans and leases after deducting allowances for loan and lease losses. Banks typically have both investment securities and loans and leases on their balance sheet as earning assets. However, only the net amount of loans and leases should be added to investment securities to arrive at the total earning assets of a bank. Gross loans and leases (choice B) do not account for potential losses and overstate the bank's earning assets. Choices C, D, and E are not directly related to a bank's earning assets.

Investment Securities Plus ________ Is Equal to a Bank's Earning