Why would a saver with $10,000 be more likely to put it into a bank account than to lend it directly to a borrower?
A)Direct loans of that sort are not legal in the United States.
B)Banks pay higher interest rates on deposits than individual borrowers are likely to pay to individual lenders.
C)It is easier and less risky to save money in a bank account and allow the bank to serve as a go-between with potential borrowers.
D)Interest received from a bank is deductible on the federal income tax, whereas interest received from an individual borrower is not.

Question

Quizplus · Accepted Answer

It is easier and less risky to save money in a bank account and allow the bank to serve as a go-between with potential borrowers. Lending directly to a borrower involves risk and effort in finding a reliable borrower and managing the loan. A bank serves as a middleman, taking on the risk and effort of lending and offering the saver more security and convenience.

Why Would a Saver with $10,000 Be More Likely to Put