If a Bank Desires to Maximize Its Net Interest Margin

question 53

Multiple Choice

If a bank desires to maximize its net interest margin, it would best achieve its goal by attempting to obtain most of its funds through ____ and use most of its funds for ____ (assuming that all loans will be repaid) .

• A)traditional demand deposits; commercial loans
• B)traditional demand deposits; consumer loans
• C)NOW accounts; consumer loans
• D)NOW accounts; commercial loans

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Definitions:

External Attribution

The process of attributing the cause of a behavior or event to situational factors outside the control of the individual.

Availability Heuristic

A cognitive heuristic that depends on readily accessible examples in an individual's memory when assessing a particular subject, idea, technique, or choice.

Mood-Congruent Memory

The tendency to recall memories that are congruent with one's current mood, enhancing the mood's effects on memory recall.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors when explaining others' behaviors.