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Question
With reference to business finance, explain the following:
Public Deposits
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Solution
- A company can accept deposits from the public to finance its medium and short-term requirements of funds.
- The companies always prefer to accept public deposits for meeting their financial needs rather than approaching banks or other financial bodies.
- Companies generally receive public deposits for different periods ranging from 6 months to 5 years.
- The rate of interest on the deposits varies from 10 percent per annum to 12 percent per annum depending upon the period of deposits and the reputation and standing of the company.
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Multiple Choice Question:
Public deposits are deposits that are raised directly from
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Public deposits are a source of long-term finance.
