Banks make their profit primarily from:
AGovernment grants given to every bank annually
BService charges levied on each transaction made
CForeign exchange trading on currency markets
DThe spread between loan interest and deposit interest
Answer & Solution
Correct answer: D. The spread between loan interest and deposit interest
Banks accept deposits at low interest and lend at higher interest. The difference (SPREAD) is their profit. The other options are secondary or not the main source.
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