By providing and communicating information, the financial system
A)reduces the difference between the return on three-month U.S. Treasury bills and the return on thirty-year U.S. Treasury bonds.
B)relieves individual savers from the necessity of searching out individual borrowers.
C)eliminates the risk in investing in the stock market.
D)guarantees investors a reasonable return on their money.

Question

Quizplus · Accepted Answer

The financial system provides information to connect savers with borrowers, thus relieving individual savers from the need to search for individual borrowers. However, it does not guarantee a certain return on investment or eliminate risk in the stock market. It also does not directly affect the difference between the returns on different types of Treasury securities.

By Providing and Communicating Information, the Financial System