The Tendency for Large Banks to Have a Higher Return

question 107

Multiple Choice

The tendency for large banks to have a higher return on equity than small banks suggests:

• A) small banks have better management than large banks.
• B) large banks can charge higher interest rates than small banks.
• C) there could be significant economies of scale in banking.
• D) larger banks are better able to escape the cost of regulation.

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Definitions:

Fitness Program

A planned regime of physical activities designed to improve and maintain one's health and physical condition.

F-test Statistic

A ratio of variances used in hypothesis testing to compare statistical models or variances across groups.

Population Variances

The measure of how data points in an entire population are spread out.

Population Variances

Measures of the dispersion of a population data set, reflecting how much the members of the population differ from the population mean.