Commercial Banks' Primary Functions

Steps:

• Recall that commercial banks accept deposits, provide loans, and offer credit products like mortgages.
• Note cash handling as a core service for transactions and accounts.
• Identify bonds as securities typically issued by governments or corporations, not commercial banks.
• Determine that commercial banks invest in bonds but do not issue them as a main activity.

Why B is correct:

• Commercial banks focus on deposit-lending intermediation; bond issuance is regulated under investment banking laws, not core commercial banking.

Why the others are wrong:

• A: Commercial banks handle cash via deposits, withdrawals, and payments.
• C: Commercial banks issue loans to businesses and individuals as a primary function.
• D: Commercial banks originate and service mortgages as home loans.

Final answer: B