Which of the Following Would Be the Best Example of a Ratio

question 63

Multiple Choice

Which of the following would be the best example of a ratio used to examine a bank's interest rate risk?

• A)Demand deposits/Total assets
• B)Interest on time deposits/Total time deposits
• C)Interest on real estate loans/Total real estate loans
• D)Interest sensitive assets/Interest sensitive liabilities
• E)Nonperforming assets/Total capital

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Definitions:

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.

Usury Laws

Regulations that set the maximum interest rate that can be charged on loans, intended to protect consumers from excessively high rates.

Rent Control

Government policies or laws that limit the amount landlords can charge for leasing a home or renewing a lease to protect tenants from sharp increases.

Price Ceiling

A government-imposed limit on the price charged for a product or service, intended to prevent prices from rising to levels considered too high for consumers.