David Ashby has just paid off the balance on his home mortgage with First American Bank.What source of liquidity does this represent to the bank?

Question

Quizplus · Accepted Answer

David Ashby's payment represents a customer loan repayment, which is a source of liquidity for the bank. The bank can use these funds to make new loans or investments, or to meet short-term funding needs. Option A (incoming customer deposit) is not applicable as Ashby is paying off his mortgage rather than making a deposit. Option B (revenues from the sale of nondeposit services) is also not applicable as it is not related to this specific transaction. Option D (sale of an asset) and option E (borrowings from the money market) are not relevant to this scenario.

David Ashby Has Just Paid Off the Balance on His