A Wholesale Bank Lends to Non-Banks, Including Households and Non-Bank

question 80

True/False

A wholesale bank lends to non-banks, including households and non-bank firms.

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Definitions:

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation, a creditor relationship with a governmental body or a corporation, or rights to ownership as represented by an option.

Discounted With Recourse

A financing arrangement where the seller is liable to the buyer for any debts or obligations not fulfilled, with the key aspect being the discount given on future receivables.

Customer Defaults

Occurs when a customer fails to fulfill their payment obligations for goods or services received.

Repay

To pay back or return money that was borrowed from an individual, institution, or entity.