Which is the best answer for the most defining characteristic of a depository institution that distinguishes it from other types of financial institutions?

Question

Quizplus · Accepted Answer

This is the most important characteristic of depository institutions as it distinguishes them from other financial institutions. Depository institutions take deposits from customers, which are recorded as liabilities on their balance sheets, and use those funds to make loans, which are assets on their balance sheets. This process is called "fractional reserve banking" and is unique to depository institutions. Options B, C, and D are not defining characteristics of depository institutions as they are also offered by other types of financial institutions.

Which Is the Best Answer for the Most Defining Characteristic