Statement I: Insurance companies are a form of financial intermediary.
Statement II: The United States Treasury generally borrows through financial intermediaries.

Question

Quizplus · Accepted Answer

Statement I is correct because insurance companies act as intermediaries between policyholders and capital markets by collecting premiums and investing them to generate returns. However, Statement II is false because the United States Treasury typically borrows directly from investors through the issuance of Treasury securities, rather than going through financial intermediaries.

Statement I: Insurance Companies Are a Form of Financial Intermediary