Question

Which of the following statements is correct.

a) stocks, bonds, and deposits are all similar in that each provides a common medium of exchange.

b) most buyers of stock and bonds prefer those issued by large and familiar companies

c) banks charge borrowers a slightly lower interest rate than they pay to depositors.

d) none of the above is correct.

Answer 1

Option b

b) most buyers of stock and bonds prefer those issued by large and familiar companies

A bond, stock, and deposits have different risks associated with it, and also it has different benefits, so the values of deposits certainly increase, but stocks are volatile so the exchange changes as per type

The bank charge borrower higher than it pays to depositors so it will earn profits and most buyers of the stock.

bonds are preferred by those issued by large and familiar companies because there are lower risks.