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True statement regarding profitability ratios

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Reference no: EM131965795

1. Which of the following is NOT a true statement regarding profitability ratios?

Profitability ratios differ when banks have different asset and liability compositions.

Small banks typically report higher net interest margins than large banks

Large banks typically have higher ROEs Large banks typically have lower efficiency ratios

All of the above are true statements

2. PNC is a large depository institution. What balance sheet accounts for PNC would be affected (and how) if Arturo Rojas opens a money market deposit account with $5,000 and the funds are lent in the overnight market for one week?

Increase liabilities (money market deposit account) by $5,000 & Increase assets (Federal funds sold) by $5,000

Decrease liabilities (money market deposit account) by $5,000 & Decrease assets (Federal funds sold) by $5,000

Increase liabilities (money market deposit account) by $5,000 & Decrease assets (Federal funds sold) by $5,000

Decrease liabilities (money market deposit account) by $5,000 & Increase assets (Federal funds sold) by $5,000

There is no effect on the balance sheet.

Reference no: EM131965795

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