Financial intermediaries

Name: Financial intermediaries
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Financial intermediaries transform assets by pooling funds from multiple investors and investing in a diversified portfolio. Life insurance companies are an example of financial intermediaries as they collect premiums from policyholders and invest the funds to earn a return. They also borrow from one group of people, such as depositors, and lend to another group, such as borrowers, earning a margin on the difference between the interest rates.

Financial Intermediaries