Describe why the efficiency ratio is a meaningful measure of cost control. Describe why it may not accurately measure cost control. What are the three primary parts of the efficiency ratio? Are there any tradeoffs among these three components? Explain.
Answer to relevant QuestionsWhich of the following banks evidences better productivity? Both banks have $ 700 million in assets and conduct the same volume and type of business off-balance sheet. Describe the basic business of each of the following types of financial companies. Then explain why the firm in parentheses would want to operate as part of a financial holding company, or as part of a bank. a. Insurance ...Describe key differences in the balance sheets and income statements of each of the following firms versus one of the banks introduced. a. Goldman Sachs Bank versus PNC Bank b. MO Bank versus Community Bank c. BMW Bank ...One author says that duration is the weighted average life of a financial instrument. A different one says that duration is a measure of elasticity. Which of the authors is correct? Or, are they both correct? What is the effective interest rate of 10 percent compounded quarterly, versus 10 percent compounded monthly?
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