Financial intermediaries serve as go betweens to link net lenders and net borrowers. Here the linkage between saver and borrower is one of
A)direct finance
B)indirect finance
C)refinance
D)compensatory finance

Question

Quizplus · Accepted Answer

Financial intermediaries facilitate indirect finance, where they receive funds from savers and then lend them out to borrowers. This is in contrast to direct finance, where savers lend their funds directly to borrowers without an intermediary. Refinance and compensatory finance are not accurate descriptions of the role of financial intermediaries in linking net lenders and borrowers.

Financial Intermediaries Serve as Go Betweens to Link Net Lenders