The main reason for trade in financial assets is
A)the desire of holders of bonds to be able to exchange them for shares of common stock.
B)the mismatch of income and spending for many individuals and businesses.
C)a shortage of money in an economy, making trade in other financial assets necessary.
D)the refusal of most modern governments to trade currency for gold or silver.

Question

Quizplus · Accepted Answer

The main reason for trade in financial assets is the mismatch of income and spending for many individuals and businesses. People may want to save money for the future or invest it, while others may need to borrow money for current expenses or investments. Financial asset markets allow investors to buy and sell securities, such as stocks and bonds, to meet their individual needs and preferences. Therefore, B is the correct choice. The other choices are incorrect because they do not reflect the main reason for trade in financial assets.

The Main Reason for Trade in Financial Assets Is