Final answer:
Managers may choose to invest idle cash in temporary investments known as c) securities. A bank's balance sheet can list money that is not physically present as it may be loaned out.
Step-by-step explanation:
When a manager invests extra cash in temporary investments, these are typically referred to as securities. Therefore, the correct answer is c) Securities.
Assets listed on a bank's balance sheet such as cash, loans, and bonds, may not physically be in the bank because they can be invested or loaned out to customers.
In a broader context, accessing financial capital can involve options like borrowing from a bank, issuing bonds, or issuing stock, each with its own set of advantages and disadvantages in terms of control and financial commitment.
As for the secondary market for loans, a loan from a borrower who has been late on payments may be valued less due to increased risk.
Conversely, a firm declaring high profits could make a loan more valuable as the ability to repay may seem more certain. In the fluctuating interest rate environment, loans made before a rise in rates could be attractive to buy.
Because they are locked into lower payment commitments compared to the current higher rates. Meanwhile, loans made prior to an interest rate decrease might sell for less, as the interest they earn would be lower than current market rates.