The net interest margin of a bank is a function of A What they pay for wages and the revenue B Their cost of funds and what they earn from giving out loans C

Q: use the term Commercial Banks to answer the question below   Explain the purpose of this type of…

A: A bank is an institution in which an individual or consumer deposit their extra or ideal cash and is…

Q: Which among the following is the quantitative method of credit control by the Central Bank? (A)…

A: In the domain of money related strategy and monetary guideline, central banks utilize different…

Q: What are Private Banks? A. The central bank and regulatory body and are responsible for the issue…

A: Banks are the financial institutions which are engaged in financial activities like accepting…

Q: Why do bank runs occur   a. Asymmetric Information   b. Moral Hazard   c. Financial dis-imediation…

A: The objective of the question is to understand the reasons behind the occurrence of bank runs.

Q: Which financial institutions are usually excluded from the definition of bank? Choose all that…

A: b. I and IV only.Credit union (I): Excluded.Mutual fund companies (IV): Excluded.This option is…

Q: In which way do commercial bank earn profit? By printing notes By charging more to lend money than…

A: A bank charges more interest on money lent and gives less interest on money borrowed. In this way a…

Q: Administration costs make small loans less profitable for banks than large ones, other things equal.…

A: Answer: The exact amount of administrative costs is the same for small loans as well as large loans.…

Q: Part D In the 1920s, severe droughts caused many farmers to lose their crops. Why would this loss of…

A: IS-LM model is widely used to denote the simultaneous equilibrium in product and money markets.…

Q: How many weeks would it take to increase the debt of a simple discount loan by 114% if the annual…

A: Debt refers to the amount owed for money borrowed. The lender agrees to lend money to the borrower…

Q: The Federal Reserve system gets the money it needs for operating expenses (Remember, pick the…

A: In the United States the Federal Reserve System is the central banking system. It main objective is…

Q: THE BIG SHORT THIS IS A TRUE STORY CHRISTIAN BALE NTEVE CARELL MYAN GOSLING PITT The Big Short…

A: The objective of these questions is to understand the key events and concepts related to the 2008…

Q: Historically, which of the following was correct about banks in America ? A. most banks were small…

A: In America, the first bank was established in 1791. Even though it was a small bank, it was willing…

Q: What is the role of the board of directors in corporate governance? What responsibilities does the…

A: Governance refers to the system under which rules and regulations have been followed by an…

Q: Some financial institutions are classified as depository institutions based on: a. the way they…

A: Financial institutions: - Financial institutions are the companies that indulge in providing…

Q: Match each of the following players in the financial system with the financial product(s) they are…

A: Commercial Banks deal in Bonds & Loans. The bonds generally include Fixed Deposit Bonds…

Q: Does the fact that the credit card issuing industry meets some criteria of perfect competition…

A: The Credit card companies consist of the feature of perfect competition, the credit card industry is…

Q: Banks are more likely to play a role in financing requiring: Select one: a. Low credit risk. b. Very…

A: One of the primary function of banks is to provide loans and advances of various forms to it's…

Q: What are the most liquid assets?

A: A liquid asset is that type of asset which can be easily converted into cash in a very short period…

Q: The suppliers of loanable funds are Select one: a. people who save money at banks. b. banks who…

A: Loanable funds refer to the supply of funds available in financial markets for borrowing purposes.…

Q: Liabilities and Net Assets Horth Stock Shares $400 Reserves Property Securities Loans Denand…

A: Liabilities of bank:  The liabilites incorporate the sum that the bank owes to other people. This by…

Q: Banks that are too-big-to-fail refers to: a. Banks with multiple branches and a large number of…

A: The primary function of financial regulators is to prevent systematic risk and avoid financial…

Q: Savings Institutions? * a. They bridge the gap between the providers of funds and the demander of…

A: Answer in step 2

Q: ow the E-banking services help the rural bank in having low Return on Equity and Return on Assets…

A: Banks are always looking for ways to increase their profits. Rural banking services are clearly more…

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.