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Question
Which of the following statements are true?
- A bank collects money from those who have surplus funds and lends this money to those who require it.
- Commercial banks do not transfer funds from one place to another.
- The principle objective of commercial banks is to earn profit.
Options
Only (i)
Only (ii)
Only (i) and (iii)
All of these
Solution
Only (i) and (iii)
Explanation:
- Statement 1: A bank takes money from people with excess finances (depositors) and loans it to others who need it (borrowers). This is the primary role of a commercial bank.
- Statement 2: Commercial banks' primary goal is to generate profit by offering financial services such as loans, investments, and deposit accounts. However, since assertion (ii) is untrue, the right answer cannot be "all of these."
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