Which statement describes a commercial bank's typical services?

• A. Provides services such as accepting deposits, making business loans and offering basic investment products.
• B. Provides insurance underwriting and risk management services.
• C. Primarily offers consumer wallets and savings accounts only.
• D. Operates as a financial intermediary between two unrelated parties in a transaction.

Answer: (A)

The main idea being tested is what services commercial banks typically provide. A commercial bank is built around taking deposits from customers and using those funds to make loans to businesses and individuals, along with offering basic investment products tied to those deposits (like basic savings or time-deposit options). This combination—deposit-taking, lending, and simple investment offerings—is what defines their everyday business and how they earn revenue.

Insurance underwriting and risk management are more characteristic of insurance companies or standalone risk-management firms, not the core suite of a typical commercial bank. A bank’s role isn’t limited to a single wallet or savings account; it involves a broader set of deposit products and credit services, plus payment and cash-management features.

Describing a bank merely as an intermediary between two unrelated parties is too broad and doesn’t capture the bank’s primary activities. While banks do channel funds from savers to borrowers, the key services that distinguish commercial banks are accepting deposits, providing loans, and offering basic investment products.