The correct answer is D. All of the above.
Bank deposits are considered to be a safe investment because banks are regulated by the government and are required to hold a certain amount of capital in reserve. This means that even if a bank fails, the government will step in to protect depositors. Additionally, banks offer a guarantee on deposits, which means that depositors are guaranteed to get their money back, even if the bank fails.
The credit worthiness of a bank is also important, as it indicates the bank’s ability to repay its debts. A bank with a high credit rating is less likely to fail, and therefore depositors are less likely to lose their money.
Finally, banks do not invest in securities, which means that depositors’ money is not exposed to the risks of the stock market. This makes bank deposits a relatively safe investment, especially for investors who are looking for a low-risk option.
Here is a more detailed explanation of each option:
- Option A: The credit worthiness of the Bank. This is important because it indicates the bank’s ability to repay its debts. A bank with a high credit rating is less likely to fail, and therefore depositors are less likely to lose their money.
- Option B: The Bank does not invest in the securities. This is important because it means that depositors’ money is not exposed to the risks of the stock market. This makes bank deposits a relatively safe investment, especially for investors who are looking for a low-risk option.
- Option C: The Bank offers a guarantee. This is important because it means that depositors are guaranteed to get their money back, even if the bank fails.
Overall, bank deposits are considered to be a safe investment because of the government’s regulation of banks, the banks’ high credit ratings, and the banks’ guarantees on deposits.