FIs perform their intermediary function in two ways

Question

Quizplus · Accepted Answer

FIs perform their intermediary function in two ways, firstly as brokers between savers and users and secondly as asset transformers by purchasing primary securities and issuing secondary securities. Therefore, option D is the best choice as it includes both ways. Option A is incorrect as it only mentions the role of brokers. Option B is incorrect as it implies the FIs purchase secondary securities to issue primary securities which is not correct, and option C is incorrect as it implies the opposite of what actually happens in reality, as FIs purchase primary securities and issue secondary securities.

FIs Perform Their Intermediary Function in Two Ways