On average,finance companies have a capital-to-total-asset ratio that is ________ than that of banks and savings and loans.

Question

Quizplus · Accepted Answer

Finance companies typically have higher capital-to-total-asset ratios than banks and savings and loans. This is because finance companies rely more on equity financing rather than deposits from customers, which makes building up a higher level of capital easier. Additionally, finance companies often specialize in riskier loans, which makes having a higher level of capital a prudent risk management strategy.

On Average,finance Companies Have a Capital-To-Total-Asset Ratio That Is ________