Which of the following is not true about Loans on a bank’s balance sheet? Loans

Question

Which of the following is not true about Loans on a bank’s balance sheet?

Loans tend to have higher default risk than Bonds.

Loans tend to reflect personal service.

Of the four types of depository institutions, Commercial Banks can make the widest variety of loans permitted by law.

Banks tend to hold less Loans relative to Bonds.

Loans include credit card balances.

Loans tend to have higher default risk than Bonds.

Loans tend to reflect personal service.

Of the four types of depository institutions, Commercial Banks can make the widest variety of loans permitted by law.

Banks tend to hold less Loans relative to Bonds.

Loans include credit card balances.

Explanation / Answer

Answer: D. Banl tend to hold less loans relative to bonds. Since Loans it the asset of any bank out of which a bank earns a huge amount of interest. so prima facie a Banks primary option is to give loans. and thus it would cannot have less loans than bond.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.