Financial markets and financial intermediaries comprise the financial system.

Question

Quizplus · Accepted Answer

This statement is true. Financial markets and financial intermediaries are both components of the financial system, which is a broad term used to describe the network of institutions and markets that facilitate the transfer of funds between savers and borrowers. Financial markets provide a forum for buyers and sellers to exchange financial assets (such as stocks, bonds, and currencies) while financial intermediaries act as intermediaries between these parties, channeling funds from savers to borrowers in exchange for a fee or interest rate. Together, these components help to facilitate the flow of funds throughout the economy, enabling individuals and businesses to access the capital they need to invest, expand, and grow.

Financial Markets and Financial Intermediaries Comprise the Financial System