Question

The unsecured source of borrowed fund which can be raised for period of six months to three years is ______.

Options

• Public deposits

• Preference shares

• Debenture

• None of these

Answer 1

The unsecured source of borrowed fund which can be raised for period of six months to three years is public deposits.

Explanation:

• Public deposits are a short to medium-term (usually six months to three years) unsecured source of borrowed capital that businesses can raise from the general public.
• These deposits are unsecured since they are not secured by collateral.
• To attract investors, they provide interest rates that are higher than those of bank deposits.