One reason why financial intermediaries are beneficial is that

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Financial intermediaries reduce the risk to depositors by spreading loans among different borrowers. This diversification reduces the chances of default and protects the depositors' money. Additionally, financial intermediaries also provide other services such as liquidity transformation and maturity transformation, which make the financial system more efficient. While financial intermediaries earn a profit, this alone is not a reason for their overall benefit. The variety of financial intermediaries is also not a defining factor in their benefit. E is incorrect because financial intermediaries typically charge lower interest rates to depositors than they charge borrowers.

One Reason Why Financial Intermediaries Are Beneficial Is That