The average implicit interest rate can be calculated as follows: the difference between an FI's average ....
A)management costs per account per year and the average fees earned per account per year, multiplied by the average annual size of the account
B)management costs per account per year and the average fees earned per account per year, divided by the average annual size of the account
C)fees earned per account per year and average management costs per account per year, multiplied by the average annual size of the account
D)fees earned per account per year and average management costs per account per year, divided by the average annual size of the account

Question

Quizplus · Accepted Answer

The average implicit interest rate is calculated by dividing the difference between an FI's average management costs per account per year and the average fees earned per account per year by the average annual size of the account. This gives a rate that represents the implied return that customers are getting on their accounts, taking into account both the costs and fees associated with managing those accounts.

The Average Implicit Interest Rate Can Be Calculated as Follows