The primary assets of commercial banks are , but they also earn income from holdings of .

Question

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The primary assets of commercial banks are loans, which generate income through the interest charged on them. Banks also earn income from holdings of bonds, which are essentially loans made by the bank to the bond issuer. While banks may hold stocks and derivatives, these are typically not primary assets and do not generate as much income as loans and bonds. Cash is also not a primary asset, as it does not generate income for the bank.

The Primary Assets of Commercial Banks Are , but They