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Direction: Mark the option which is most suitable:
Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.
Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.
  • a)
    If Both assertion and reason are true, and reason is the correct explanation of assertion.
  • b)
    If Both assertion and reason are true, but reason is not the correct explanation of assertion.
  • c)
    If Assertion is true, but reason is false.
  • d)
    If Both assertion and reason are false.
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Direction: Mark the option which is most suitable:Assertion : Banks c...
Banks in India hold about 15 percent of their deposits as cash as the remaining deposits are used to provide loans. The interest charged on Loans is higher than the interest paid on deposits and the difference between the two interest rates is the major source of income for banks.
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Most Upvoted Answer
Direction: Mark the option which is most suitable:Assertion : Banks c...
Explanation:

Assertion: Banks charge a higher interest rate on loans than what they offer on deposits.

Reason: The difference between what is charged from borrowers and what is paid to depositors is their main source of income.

Option A: If Both assertion and reason are true, and reason is the correct explanation of assertion.

This option is correct. Banks charge a higher interest rate on loans to earn a profit. The difference between the interest rate charged from borrowers and the interest rate paid to depositors is called the "spread." This spread is the primary source of income for banks. Therefore, the reason correctly explains why banks charge a higher interest rate on loans.

Option B: If Both assertion and reason are true, but reason is not the correct explanation of assertion.

This option is incorrect because the reason correctly explains why banks charge a higher interest rate on loans.

Option C: If Assertion is true, but reason is false.

This option is incorrect because the reason is true and correctly explains why banks charge a higher interest rate on loans.

Option D: If Both assertion and reason are false.

This option is incorrect because both the assertion and reason are true.

Therefore, the correct answer is option A.
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Community Answer
Direction: Mark the option which is most suitable:Assertion : Banks c...
A tangent is the secant
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Read the source given below and answer the questions that follows:Banks use the major portion of the deposits to extend loans. There is a huge demand for loans for various economic activities. Banks make use of the deposits to meet the loan requirements of the people. In this way, banks mediate between those who have surplus funds (the depositors) and those who are in need of these funds (the borrowers). Banks charge a higher interest rate on loans than what they offer on deposits. A large number of transactions in our day-to-day activities involve credit in some form or the other. Credit (loan) refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment. In rural areas, the main demand for credit is for crop production. Crop production involves considerable costs on seeds, fertilisers, pesticides, water, electricity, repair of equipment, etc. The various types of loans can be conveniently grouped as formal sector loans and informal sector loans. Among the former are loans from banks and cooperatives. The informal lenders include moneylenders, traders, employers, relatives and friends, etc. The Reserve Bank of India supervises the functioning of formal sources of loans. For instance, we have seen that the banks maintain a minimum cash balance out of the deposits they receive. The RBI monitors the banks in actually maintaining cash balance. There is no organisation which supervises the credit activities of lenders in the informal sector. They can lend at whatever interest rate they choose. There is no one to stop them from using unfair means to get their money back. Compared to the formal lenders, most of the informal lenders charge a much higher interest on loans. Thus, the cost to the borrower of informal loans is much higher. In recent years, people have tried out some newer ways of providing loans to the poor. The idea is to organise rural poor, in particular women, into small Self-Help Groups (SHGs) and pool (collect) their savings.Answer the following MCQs by choosing the most appropriate optionQ. An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.

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Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer?
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Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer? for Class 10 2024 is part of Class 10 preparation. The Question and answers have been prepared according to the Class 10 exam syllabus. Information about Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 10 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Class 10. Download more important topics, notes, lectures and mock test series for Class 10 Exam by signing up for free.
Here you can find the meaning of Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Direction: Mark the option which is most suitable:Assertion : Banks charge a higher interest rate on loans than what they offer on deposits.Reason : The difference between what is charged from borrowers and what is paid to depositors is their main source of income.a)If Both assertion and reason are true, and reason is the correct explanation of assertion.b)If Both assertion and reason are true, but reason is not the correct explanation of assertion.c)If Assertion is true, but reason is false.d)If Both assertion and reason are false.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice Class 10 tests.
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