Use the Following Information for Questions -What Is 1^st State's Efficiency Ratio?
A) 2

question 85

Multiple Choice

Use the following information for questions .
1 st State Bank Balance Sheet Assets
$\begin{array}{lrr}\text { Cash and Due from Banks } & \$ & 50 \\\text { Investments } & \$ & 300 \\\text { Federal Funds } & \$ & 10 \\\text { Loans } & \$ & 350 \\\text { Premises } & \$ & 90\\\text { Average Total Assets }&\$&800\\\\\text { Liabilities \& Equity }\\\text { Demand Deposits } & \$ & 100 \\\text { Time Deposits } & \$ & 300 \\\text { Federal Funds } & \$ & 300 \\\text { Equity } & \$ & 100\\\text { Average Total Liabilities \& Equity }&\$&800\\\\\text { Income Statement }\\\text { Interest Income } & \$ & 100 \\\text { Interest Expense } & \$ & 75 \\\text { Non-Interest Income } & \$ & 5 \\\text { Non-Interest Expense } & \$ & 25\\\text { Net Income }&\$&5\end{array}$
-What is 1^st State's efficiency ratio?

• A) 2.53%
• B) 17.51%
• C) 0.83%
• D) 0.45%
• E) 83.3%

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Definitions:

Higher Prices

An increase in the cost to purchase goods and services, which can impact consumer behavior and inflation rates.

Horizontal Demand

A market condition where the demand for a product remains constant despite changes in its price.

Marginal Cost

The cost incurred by producing one additional unit of a product or service, which can vary depending on the level of production.

Same Product

Refers to goods or services that are identical in features, quality, and performance, providing no substantial difference to consumers.