Financial intermediaries pool the funds of:
A) many small savers and make loans to a few large borrowers.
B) a few savers and make loans to many borrowers.
C) many small savers and make loans to many borrowers.
D) a few large savers and make loans to a few large borrowers.

Question

Quizplus · Accepted Answer

Financial intermediaries, such as banks and credit unions, collect small amounts of money from many individuals and pool these funds together to lend to a large number of borrowers. This enables individuals with smaller amounts of savings to still be able to participate in lending and investing activities, while also allowing for a greater range of borrowers to access the funds. Therefore, the correct answer is C - financial intermediaries pool the funds of many small savers and make loans to many borrowers.

Financial Intermediaries Pool the Funds Of