Small savers prefer to use financial intermediaries rather than lending directly to borrowers because:
A) financial intermediaries offer the savers a wide portfolio of financial instruments.
B) financial intermediaries offer much higher interest rates than can be obtained directly from borrowers.
C) borrowers dislike dealing with savers.
D) savers have a claim with the ultimate borrower via the financial intermediary.

Question

Quizplus · Accepted Answer

Financial intermediaries provide small savers with access to a diversified portfolio of financial instruments, which directly lending to borrowers does not. This diversification helps in managing risk.

Small Savers Prefer to Use Financial Intermediaries Rather Than Lending