Finance involves acquiring and managing funds. Bank balance sheets may list money under assets that is not physically in the bank. Buying loans in the secondary market requires considering borrower behavior, interest rates, profitability, and economic conditions.
Finance involves acquiring and managing funds. In the context of the question, finance encompasses activities such as obtaining loans, managing inventory, and handling securities.
When considering a bank balance sheet, the money listed under assets may not physically be in the bank. This is because banks invest and lend out the money they hold, turning short-term deposits into long-term loans.
Buying loans in the secondary market involves assessing various factors. The price of a loan may be influenced by the borrower's payment history, changes in interest rates, the firm's profitability, and overall economic conditions.
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