The general role of financial intermediaries is to:
A.Provide advice to consumers on how they should handle their finances.
B. Help ensure there is enough money in circulation.
C.Provide funds to the federal government to finance a trade deficit.
D. Channel money from savers to those who want to borrow.
Solution
D. Channel money from savers to those who want to borrow.
Explaination:
A financial intermediary is a financial institution that borrows from savers and lend to individuals or firms that need resources for investment. The investments made by financial intermediaries can be in loan and/or securities.
The principle role of financial intermediaries is transforming financial assets that are less desirable for a large part of the public into other financial asset, which is preferred more by the public. This transformation involves at least four economical functions: providing maturity intermediation, risk reduction via diversifications, reducing the costs of contracting and information processing and providing a payment mechanism.
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The general role of financial intermediaries is to- A-Provide advice t.docx
1. The general role of financial intermediaries is to:
A.Provide advice to consumers on how they should handle their finances.
B. Help ensure there is enough money in circulation.
C.Provide funds to the federal government to finance a trade deficit.
D. Channel money from savers to those who want to borrow.
Solution
D. Channel money from savers to those who want to borrow.
Explaination:
A financial intermediary is a financial institution that borrows from savers and lend to
individuals or firms that need resources for investment. The investments made by financial
intermediaries can be in loan and/or securities.
The principle role of financial intermediaries is transforming financial assets that are less
desirable for a large part of the public into other financial asset, which is preferred more by the
public. This transformation involves at least four economical functions: providing maturity
intermediation, risk reduction via diversifications, reducing the costs of contracting and
information processing and providing a payment mechanism.
