One of the factors to consider when a bank chooses among the nondeposit funding sources is the relative cost.In general,managers prefer to borrow from the cheapest source of funds,although other factors do play a role.

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This statement is true. Banks prefer to borrow from the cheapest source of funds to minimize their cost of funding. However, other factors such as the availability, flexibility, and maturity profile of the funding source may also influence their decision.

One of the Factors to Consider When a Bank Chooses