Savers who do not want to research the credit-worthiness of borrowers take advantage of ________ finance,where risk is ________.

Question

Quizplus · Accepted Answer

This question is discussing savers who do not want to research the credit-worthiness of borrowers, which implies that they are likely not participating in direct finance where they would lend money directly to borrowers. Instead, they are likely using indirect finance, where they invest in financial intermediaries that lend to borrowers. The term "spread" refers to the difference between the interest rate earned by savers and the interest rate charged to borrowers, which is how financial intermediaries make money. Therefore, the correct answer is C) indirect, spread.

Savers Who Do Not Want to Research the Credit-Worthiness of Borrowers