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They are both holders of someone else's debt.

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15y ago
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Q: What best explains how bondholders and banks serve a similar function?
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Related questions

What Best explains how bondholders and banks serve a function?

They are both holders of someone else's debt.


Best explains why a bondholder is similar to a bank?

Bondholders loan money to bond issuers just as banks loan money to customers.


What best explains why a bondholder is similar to a bank?

Bondholders loan money to bond issuers just as banks loan money to customers.


Why is a bondholder similar to a bank?

Bondholders loan money to bond issuers just as banks loan money to customers.


Why a bondholder is similar to a bank?

Apex :) Bondholders loan money to bond issuers just as banks loan money to customers


What is a hidden production function?

In the field of economics, a production function is a calculation that explains the relationship between what it costs to produce goods and the actual quantity of goods you were able to produce. An example of a "hidden" production function would be money transfers at banks.


Function of public sector banks?

function of public sector in india


What are the function of the central bank in Ghana?

1)it is banker to banks 2)lender to the banks


What is a banks main function?

lol nothin


What are the problems faced by Indian banks?

Similar to those face by all other banks


In what way are bondholders and banks similar?

In effect, these are both instances of an institution taking a loan from an individual. When you put your money into a bank, you are in essence loaning your money to the bank. They pay you interest on the money, and then they loan it out at a higher interest rate and keep the difference. Likewise, when you take out a bond you are in effect loaning your money to the government, which will pay you back with interest at a later time.


What are external sources of financing?

The first external source of finance is debt, which includes loans from banks and bonds purchased by bondholders. The second external source of finance is equity, which includes common stock and preferred stock.