Financial markets and intermediaries:

Question

Quizplus · Accepted Answer

Financial markets and intermediaries perform all three functions mentioned in the options. They channel savings to real investments by connecting those who have excess funds (savers) with those who require funding (borrowers) through financial instruments such as stocks, bonds, and loans. They enable investors and businesses to reduce risk by providing access to tools such as derivatives, insurance, and diversification. Finally, they provide liquidity by allowing investors to buy and sell their financial assets quickly and at a fair price.

Financial Markets and Intermediaries