All categories

3 years ago

Where do banks get money to lend to borrowers?

Business

2 answers:

Korolek [52]3 years ago

7 0

The option D is correct.

Banks get money to lend to borrowers from the depositors.

Further Explanation:

The bank provides the money to the borrowers and deposits the money from the savers. The people save their excess money in the bank to earn the interest on the deposit money. The borrowers get the money from the bank and pay interest on the borrowing amount.

Depositors are those people who saves their money in the bank. Borrowers are those people who takes loan from the bank.

Justification for the correct and incorrect answer:

The bank’s management: This option is incorrect.

The bank’s management is the process involved in managing the bank. The management takes decision whether to give the loan to the person or not, how much amount of loan is to be extent. So, this option is incorrect.

Shareholders: This option is incorrect.

Shareholders are the owner of the bank, they provide finance to the bank for expanding the business. The amount of shareholder money cannot be used to provide loan. This option is not correct.

Government: This option is incorrect.

The government does not provide any type of financial help to provide the loan to the lender. So, this option is incorrect.

Depositors: This option is correct.

Depositors are those people who saves their money in the bank. This money is utilized for providing the loan to the borrower. So, this option is correct.

Learn more:

1. Learn more about federal reserve bank

brainly.com/question/9417688

2. Learn more about recording bank account

brainly.com/question/3212764

3. Learn more about national retails bank

brainly.com/question/7706363

Answer details:

Grade: Middle School

Subject: Banking

Chapter: Borrowing

Keywords:

bank, lend, borrowers, customer, depositor, bank’s management, government, shareholders, excess money, interest rate, money, managing, owner, expanding the business, finance, borrowing.

Marysya12 [62]3 years ago

5 0

The answer is "depositors".

An individual who is making a deposit with the bank is known as a depositor. The depositor is the moneylender of the cash which will be come back to him/her toward the finish of the store time frame.

A depositor (you) places cash in a banks vault, at that point the bank putts enthusiasm on it, and can utilize it in the event that it needs to. Up to a specific measure of it remains in the bank on the off chance that you need to come and withdraw.

You might be interested in

The Two Sisters has a return on assets of 9 percent and a dividend payout ratio of 75 percent. What is the internal growth rate

Anettt [7]

The internal growth rate of a firm is best described as the: A. minimum growth rate achievable assuming a 100 percent retention ratio. B. minimum. The tax rate and the dividend payout ratio will be held constant. Current and. The Two Sisters has a 9 percent return on assets and a 75 percent retention ratio.

hope this helps.

7 0

3 years ago

Goodwill is: Group of answer choices Amortized over the greater of its estimated life or forty years. Only recorded by the selle

Tems11 [23]

Explanation:

Goodwill in accounting is an intangible asset that arises when a buyer acquires an existing business. Goodwill represents assets that are not separately identifiable. Goodwill does not include identifiable assets that are capable of being separated or divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, identifiable asset, or liability regardless of whether the entity intends to do so. Goodwill also does not include contractual or other legal rights regardless of whether those are transferable or separable from the entity or other rights and obligations. Goodwill is also only acquired through an acquisition; it cannot be self-created. Examples of identifiable assets that are goodwill include a company’s brand name, customer relationships, artistic intangible assets, and any patents or proprietary technology. The goodwill amounts to the excess of the "purchase consideration" (the money paid to purchase the asset or business) over the net value of the assets minus liabilities. It is classified as an intangible asset on the balance sheet, since it can neither be seen nor touched. Under US GAAP and IFRS, goodwill is never amortized, because it is considered to have an indefinite useful life. Instead, management is responsible for valuing goodwill every year and to determine if an impairment is required. If the fair market value goes below historical cost (what goodwill was purchased for), an impairment must be recorded to bring it down to its fair market value. However, an increase in the fair market value would not be accounted for in the financial statements. Private companies in the United States, however, may elect to amortize goodwill over a period of ten years or less under an accounting alternative from the Private Company Council of the FASB.

8 0

2 years ago

As a result of their influence on the quantity, variety, and quality of products, trade barriers ________ domestic consumers.

likoan [24]

The answer in the space provided is hurt. It is because of their influence in the following factors such as the variety, quantity and the quality of products, the trade barriers will most likely hurt the domestic consumers involved in it.

5 0

3 years ago

Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $11.40, but management expects to reduce the p

drek231 [11]

Answer:

The correct answer is $57.

Explanation:

According to the scenario, the computation of the given data are as follows:

Dividend = $11.40

Growth rate = -0.05

Required rate of return = 0.14

So, we can calculate the price by using following formula:

Price = Dividend × ( 1 + Growth rate) ÷ ( return rate - growth rate)

By putting the value, we get

= $11.4 × ( 1 - 0.05) ÷ ( 0.14 + 0.05)

= $57

3 0

3 years ago

Marine Expeditors has three divisions. Division A is the core of the business and represents 80 percent of the firm's operations

siniylev [52]

Answer: 100%

Explanation:

The Weighted Average Cost of Capital calculates the required return needed to fund any of the company's projects because it shows the cost of capital of raising funds for that project.

The cost does not increase or decrease based on the proportion of a business that a department is as any department/ project will incur that cost. The cost of the new project will therefore be the same as the company WACC.

8 0

3 years ago