Final answer:
Receivables include interest due from loans to customers and loans by a company to other entities. Trading securities and inventory on account are not receivables. The valuation of loans in the secondary market varies based on borrower reliability and shifts in market interest rates.
Step-by-step explanation:
The receivables classified in the student's question are interest due from loans to customers and loans by a company to other entities. Receivables are monetary claims against others that are expected to be collected in cash. Interest due from loans to customers and money lent out by a company to other entities are expected future cash flows and therefore, are categorized as receivables. Trading securities and inventory purchased on account are not considered receivables; trading securities are investments, and inventory on account is considered a current asset but not a receivable.
Regarding the bank balance sheet, the money listed as assets may not be physically present in the bank because banks lend out the majority of their deposits and hold only a fraction in reserve. This practice is known as fractional-reserve banking. The bank balance sheet will show these loans as assets because they represent future income from the interest payments.
When buying loans in the secondary market, the value you might assign to a loan will depend on several factors. If a borrower has been late on loan payments, the loan is riskier and you would pay less for it. If interest rates rise, the older loan with lower interest becomes less attractive, meaning you'd pay less.
Conversely, a loan to a borrower with declared high profits is less risky, so you might pay more. If interest rates fall, existing loans with higher rates become more valuable, so you would be willing to pay more for these loans.