For savers,the role of financial intermediaries is to:
A) earn more returns on their investments.
B) ensure that all borrowers can fund their investments.
C) reduce the default risk on money they save and lend.
D) avoid taxes from income earned on investments.

Question

Quizplus · Accepted Answer

Financial intermediaries help to reduce default risk on savings and investments by screening potential borrowers and diversifying portfolios. This makes it safer for savers to entrust their money to financial institutions rather than directly investing in individual borrowers or assets. The other choices (A, B, and D) may be benefits of using financial intermediaries, but reducing default risk is their primary role for savers.

For Savers,the Role of Financial Intermediaries Is To