Bank T generally obtains a high percentage of its funds from wholesale CDs. Bank V which obtains most of its funds from retail CDs. Bank Z obtains its funds from checking accounts. The bank that will incur the highest interest expenses is ____.
A)Bank T
B)Bank V
C)Bank Z
D)all banks are the same

Question

Quizplus · Accepted Answer

Bank T obtains most of its funds from wholesale CDs which usually have higher interest rates than retail CDs or checking accounts. Therefore, Bank T will incur the highest interest expenses compared to Bank V and Bank Z.

Bank T Generally Obtains a High Percentage of Its Funds