Discussion
What is the full form of NIM?
Answer: A
Correct answer: Net Interest Margin
NIM is the difference between the interest a bank earns and the interest it pays, as a proportion of its earning assets:
\[ \text{NIM} = \frac{\text{Interest earned} - \text{Interest paid}}{\text{Average earning assets}} \]It is the core measure of how profitably a bank does its central business of borrowing at one rate and lending at a higher one.
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