An institution that collects funds from lenders and distributes these funds to borrowers is called
A) a financial intermediary.
B) the Federal Reserve System.
C) a mercantile exchange.
D) a currency market.

Question

Quizplus · Accepted Answer

A financial intermediary is an institution that acts as a middleman between borrowers and lenders, collecting funds from lenders and distributing these funds to borrowers. Examples of financial intermediaries include banks, credit unions, and investment funds. The Federal Reserve System is a central banking system that regulates monetary policy and the money supply in the United States. A mercantile exchange is a marketplace where commodities and other raw materials are bought and sold, and a currency market is a marketplace where different currencies from around the world are exchanged. While these types of markets may be involved in the process of financial intermediation, they are not themselves financial intermediaries.

An Institution That Collects Funds from Lenders and Distributes These