Banks' borrowed funds come mostly from

Question

Quizplus · Accepted Answer

Banks typically borrow funds by issuing bonds and accepting deposits from customers. This allows them to raise funds from both institutional investors and individual savers. Buying bonds and loans (A) is a way for banks to invest their own funds, not to borrow them. Buying stocks and selling Treasury bonds (B) is not a common source of funding for banks, as it involves taking on more risk and may not be suitable for banks' conservative business model. Issuing stocks and buying Treasury bonds (C) is also not a common way for banks to raise funds, as issuing stocks dilutes existing shareholders' equity and may not be a cost-effective way to borrow.

Banks' Borrowed Funds Come Mostly from