Fernando Bank has interest expense of $300 million, earning assets of $6,000 million and anet interest margin of 5 percent. The bank also has interest-bearing liabilities of $5,000million. Fernando Bank's spread is:O 4 percentO 1 percentO2 percent3 percent

Net interest margin = (Net income - Interest paid) / Average assets 5% = (Net income - $300) / $6000…

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k has interest expense of $300 million, earning argin of 5 percent. The bank also has interest-b ndo Bank's spread is:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Fernando Bank has interest expense of $300 million, earning assets of $6,000 million and a
net interest margin of 5 percent. The bank also has interest-bearing liabilities of $5,000
million. Fernando Bank's spread is:
O 4 percent
O 1 percent
O2 percent
3 percent

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