Final answer:
Bonds are long-term instruments that are used by various entities for borrowing. They are considered fixed assets for banks as they provide future economic benefits.
Step-by-step explanation:
Bonds are long-term instruments that are used by various entities such as the federal and local government, private companies, and nonprofit organizations for borrowing money. A bank typically uses some of the money it receives in deposits to buy bonds, usually bonds issued by the U.S. government. Bonds are considered an asset for banks because they represent a stream of future payments. For example, let's say that Safe and Secure Bank holds bonds worth a total value of $4 million. These bonds are classified as fixed assets because they have a long-term nature and provide future economic benefits.