In commercial banks, the subordinate debentures and subordinate notes are considered as ___________?
Correct answer: C. banks liabilities
- A. stated rates
- B. banks debentures
- C. banks liabilities
- D. banks deposits
Explanation
Subordinated debentures and notes represent borrowed funds that the bank must repay, so they appear as bank liabilities. They are debt instruments rather than deposits, even though they may contribute to regulatory capital.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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