A bank's net interest margin is commonly defined as
A)interest revenues minus interest expenses.
B)(interest revenues minus interest expenses)/total assets.
C)(interest revenues minus interest expenses)/total liabilities.
D)(interest revenues minus interest expenses)/capital.

Question

Quizplus · Accepted Answer

Net interest margin is defined as (interest revenues minus interest expenses) divided by total assets. This ratio measures the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders (for example, deposits), relative to the total assets of the bank.

A Bank's Net Interest Margin Is Commonly Defined as