Which of the following describes the duty of a bank to manage customer funds?

The duty of a bank to manage customer funds is centered around the principle of using the customer's money properly. This means that banks are expected to act with care and diligence in handling deposits, providing services that align with the best interests of their customers.

Using funds properly includes ensuring that deposits are secure, maintaining adequate liquidity to meet withdrawal demands, and conducting transactions in a manner that adheres to industry regulations and standards. It also involves not engaging in reckless or irresponsible banking practices that could jeopardize the funds of customers.

Responsible fund management fosters trust and confidence in the banking system, as customers expect their bank to handle their money in a way that prioritizes security and compliance over speculative or high-risk ventures. This expectation is crucial for maintaining the integrity of financial institutions and the overall economy.

In contrast, options that suggest irresponsible use of customer money, investing in high-risk stocks, or retaining interest earned do not align with a bank’s fiduciary responsibility toward its clients. These practices could lead to significant losses or diminish customer trust, which is why they are not appropriate descriptions of a bank’s duty.