Question

Banks are financial intermediaries that: A. have customer deposits as its primary asset and loans to borrowers as their primary liability.

Answer 1

False

Step-by-step explanation:

Exactly the opposite is true: banks are financial intermediaries that have customer deposits as their primary liability, and customer loans as their primary asset.

The reason is that customer deposits can be withdrawn at any time (at least in theory), and the bank is obliged to give back the deposited money to the customer.

Loans, on the other hand, are assets, because they provide the bank with interset, and an asset is simply an economic resource that provides further economic gain to its owner.