Question

A __________ is a profit-seeking organization that receives deposits from individuals and corporations and uses some of these deposits to make loans.

Answer 1

Answer:

Commercial bank

Explanation:

A commercial bank accepts cash deposits from the general public and lends a portion of the money as loans to make profits. Commercial banks make profits by charging a high-interest rate on credit issued than the interest rate they offer on deposits. By accepting deposits and lending to other customers, commercial banks act as intermediaries between suppliers and users of credit.

Commercials are profit-making institutions. Although their primary function revolves around accepting deposits and issuing out loans, they also perform other duties such as;

• Discounting bills of exchange
• Overdraft facility
• Agency functions, including payment functions and insurance of letters of credit and checks.
• General utility services including foreign exchange transactions, underwriting securities, and safe deposits.