Which of the Following Is NOT an Advantage of Credit

question 19

Multiple Choice

Which of the following is NOT an advantage of credit unions?

• A)They can offer attractive rates to their members because they are nonprofit and therefore are not taxed.
• B)Their noninterest expenses are relatively low, because their offices and furniture are often donated or provided at a very low cost through the affiliation of their members.
• C)Their large membership allows them to effectively diversify geographically.
• D)All of these are advantages of credit unions.

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Definitions:

Return On Total Assets

A profitability ratio that measures the profitability of total assets without considering how the assets are financed, computed as income plus interest expense divided by average total assets.

Profitability

A measure of how effectively a company generates profit from its revenues or assets.

Debt And Equity

The two major sources of financing for a company, where debt involves borrowing money to be repaid, and equity involves raising money by selling interests in the company.

Horizontal Analysis

A financial analysis technique that compares historical financial data over a series of reporting periods, allowing for the assessment of trends and growth patterns.