Question

51:3 FEED Content attribution QUESTIONS. 1 POINT True or false? Bonds are considered a liability for a bank because banks will receive a stream of payments on bonds in the future. Select the correct answer below: O True O False FEEDBAC Content attribution

Answer 1

Option B - False

Bonds are considered a liability for a bank is definitely true if a bank sells bonds to the public but the second part is not right which states that it is considered a liability because banks will receive a stream of payments on bonds in the future. If the bank sells its bonds, then it is considered a liability for the bank because the bank needs to pay back the amount that it had borrowed from the public along with the annual interest rate. On the other hand, if the bank buys bonds from other banks or organizations, then it would be considered an asset for the bank because then that asset can generate more money in the form of bond interest in the future.