Which of the following best defines financial intermediaries?
A)They are the same as financial markets.
B)They are individuals who make a profit by buying a stock low and selling it high.
C)They are a more general name for financial assets, such as stocks, bonds, and chequing accounts.
D)They are financial institutions through which savers can indirectly provide funds to borrowers.

Question

Quizplus · Accepted Answer

Financial intermediaries are institutions that act as middlemen between savers and borrowers. Their role is to channel funds from savers to borrowers and help facilitate transactions in the financial market. Examples of financial intermediaries include banks, insurance companies, investment firms, and pension funds. Financial markets, on the other hand, are venues where buyers and sellers come together to trade financial instruments, such as stocks, bonds, and derivatives. Option B and C are incorrect because financial intermediaries are not individuals who profit from buying and selling securities, nor are they a synonym for financial assets.

Which of the Following Best Defines Financial Intermediaries