The following functions are provided by financial intermediaries for the smooth functioning of the economy:
I. The payment mechanism II) Borrowing and lending
III. Pooling risk
A) I only
B) I and II only
C) I, II, and III
D) III only

Question

Quizplus · Accepted Answer

Financial intermediaries play an essential role in the smooth functioning of the economy by providing a range of services. The payment mechanism is essential for transferring funds between different parties, and financial intermediaries facilitate this process. Borrowing and lending are also crucial functions of financial intermediaries, as they help individuals and businesses obtain financing for their activities. Finally, pooling risk is another key function of financial intermediaries, as they enable individuals and businesses to spread their risks across a large group of people, reducing the likelihood of significant financial losses. Therefore, all three options (I, II, and III) are correct.

The Following Functions Are Provided by Financial Intermediaries for the Smooth