1.

How is a depository similar to a bank?

Answer»

A Depository can be compared with a bank, which holds the funds for depositors. An analogy between a bank and a depository may be drawn as follows:

BANKDEPOSITORY
Holds funds in an accountHold securities in an account
Transfers funds between accounts on the instruction of the account holderTransfers securities between accounts on the instruction of the account holder.
Facilitates transfers without having to handle moneyFacilitates transfers of ownership without having to handle securities.


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