The Average Implicit Interest Rate Can Be Calculated as Follows

question 23

Multiple Choice

The average implicit interest rate can be calculated as follows: the difference between an FI's average ....

• A)management costs per account per year and the average fees earned per account per year, multiplied by the average annual size of the account
• B)management costs per account per year and the average fees earned per account per year, divided by the average annual size of the account
• C)fees earned per account per year and average management costs per account per year, multiplied by the average annual size of the account
• D)fees earned per account per year and average management costs per account per year, divided by the average annual size of the account

---

Definitions:

Ending Inventory

The worth of products ready for purchase at the conclusion of a financial period.

Understatement

An error or omission that causes the reported amount or value of an asset, liability, income, or expense to be lower than the true amount.

Net Income

The company's residual income following the deduction of all expenses and taxes from its total revenue.

Cash Flow

A financial metric that measures the net amount of cash and cash equivalents being transferred into and out of a business.