Question

In comparison to small banks, larger banks typically have:_______.

a. more equity capital.
b. more core deposits.
c. more off-balance-sheet activities.
d. larger net interest margins.
e. all of these choices are correct.

Answer 1

c. more off-balance-sheet activities.

Step-by-step explanation:

Large banks typically have more off-balance-sheet activities and more loans per dollar assets which lead to an increase in average cost.

Larger banks have lower equity capital than smaller banks thereby paying higher interests on their funds.

Larger banks have lesser core deposits than smaller banks. Smaller banks rely more on core deposits with rates not varying as open market rates, whereas large bank depend on wholesale funds that vary with market rates.