One profitable form of business undertaken by the commercial banks is
QuestionOne profitable form of business undertaken by the commercial banks is
Related Lesson: Commercial and Merchant Banks | Financial Institutions
The correct answer is C.
The question is asking which form of business undertaken by commercial banks is profitable. The options are A) issuing of cheques, B) payment of standing order, C) lending money to borrowers (which is the correct answer), and D) accepting cheques from customers.
Commercial banks are financial institutions that provide services such as accepting deposits, making loans, and offering basic financial products like savings accounts and certificates of deposit. One of the most profitable forms of business undertaken by commercial banks is lending money to borrowers. This is because the interest rates charged on loans are typically higher than the interest paid on deposits, which generates revenue for the bank.
Issuing cheques, accepting cheques from customers, and payment of standing order are important services offered by commercial banks, but they are not as profitable as lending money to borrowers. Issuing cheques allows customers to withdraw money from their accounts, while accepting cheques from customers involves verifying and processing cheques deposited into accounts. Payment of standing order allows customers to make regular payments, such as rent or utility bills, automatically from their accounts.
In summary, the correct answer to this question is C) lending money to borrowers, as it is the most profitable form of business undertaken by commercial banks.
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