Which Statement Best Characterizes the Lending Strategy of Banks

question 174

Multiple Choice

Which statement best characterizes the lending strategy of banks?

• A) Banks make most their profits from account fees.
• B) Banks lend mostly to large and familiar companies rather than smaller local firms.
• C) Banks charge borrowers a slightly lower interest rate than they pay to depositors.
• D) Banks lend money both for investment and consumption purposes.

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Definitions:

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a particular target market.

Market

An area or arena in which commercial dealings are conducted.

Pricing Objectives

Pricing objectives are the goals a company aims to achieve through its pricing strategies, such as maximizing profit, increasing market share, or targeting a specific market segment.

Components

Fundamental parts or elements that combine to form a complex system, mechanism, or product.