Single Answer MCQ
Q-00015845
Why do banks often charge higher interest rates for loans compared to the interest paid on deposits?
1
To discourage borrowers
2
To cover operational costs
3
To reduce depositors' earnings
4
To motivate more savings
Answer and Solution
Answer
B. To cover operational costs
Solution:
Higher loan interest rates help banks cover their operational costs and risk of default while still attracting depositors by offering competitive rates.
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