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

Purchased funds refer to funds that a bank acquires through borrowing from external sources such as other banks, customers or the money market. These funds usually come at a higher cost than deposits, which are funds that the bank receives from its customers. Therefore, if a bank has more purchased funds than the average bank, it is likely to have a higher interest expense ratio since it is paying more for these funds.

If a Bank Has More Purchased Funds Than the Average