Question

3. In a bank's balance sheet, the main item on the liabilities side is

A. term loans

B. deposits

C. government securities

D. home mortgages

4. Which of the following best describes the business of retail banking?

A. Banking services specially designed for high-net-worth individuals

B. Banking transactions in debt securities

C. Banking transactions that involve low-denomination transactions with the household sector

D. Banking transactions that involve high-denomination transactions with the business sector

Answer 1

3) In the bank balance sheet, the major liabilities are the deposits which it has taken from the public. So, the correct answer is

B) Deposits

Term loans, Government securities and home mortgages are asset for the banks because bank has either invested in these or lend them as loans.

4) When we say retail banking, that usually means the small denominations transactions with the household sector because retail transactions are small in amount. So, the correct answer is

C. Banking transactions that involve low-denomination transactions with the household sector

HNI clients are high net worth individuals and these transactions are large. Business transactions are classified as commercial account.