In Order for Ratio Analysis to Be Meaningful for a Bank

question 56

True/False

In order for ratio analysis to be meaningful for a bank holding company,a large portion of the services should be bank-related.

---

Definitions:

Discounting

The process of determining the present value of a payment or series of payments that will be received in the future.

Present Value Interest Factor

A factor used to calculate the present value of a sum that is to be received in the future, accounting for the time value of money.

Non-Interest Bearing Note

A debt instrument that does not pay interest but is issued at a discount to its redemption value.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, used to assess the worth of an investment.