Question

We bank's equity multiplier is FALSE (hint, the uation as in ROA XEM ROR) The higher the ROB assuming the bank is making money. plier, the safer the bank, other things equal Wrof a bank is typically around 5. Widers have an incentive towards high equity multipliers while the regulators lean low equity multipliers. 22. Core deposits like checking and savings accounts: A have high interest costs relative to money market funding B. have high administrative costs relative to money market finding have high interest costs and high administrative costs relative to money market Runding have neither high interest costs nor high administrative costs relative to money market funding hich type of loan is likely to have collateral backing it? red business loans age loans for homes ens for cars above loans are collateralized

Answer 1

D. Have neither high-interest costs nor high administrative costs relative to money market funding.

Money market funding is open-ended mutual funds as their expected return is greater the interest cost is higher or costlier. They are maintained by professional and hence high administrative fees.