Answer:
Banks earn most of their profits by selling short term and liquid liabilities, and using the proceeds to buy long term illiquid assets.
Step-by-step explanation:
Banks earn some of their profit from trading activities: selling short term liabilities and buying long term assets. But that is not the main source of their income.
Commercial banks earn most of their profits from charging higher interest rates on loans than the interest it pays to its depositors. Banks use depositors' money in order to hand out loans to individuals or businesses.