Which statement best defines financial intermediaries?
A) They are the same as financial markets.
B) They are individuals who make a profit by buying a stock low and selling it high.
C) They are a more general name for financial assets, such as stocks, bonds, and chequing accounts.
D) They are financial institutions through which savers can indirectly provide funds to borrowers.

Question

Quizplus · Accepted Answer

Financial intermediaries are institutions such as banks, credit unions, and investment companies that facilitate the flow of funds between savers and borrowers. They act as intermediaries by accepting deposits from savers and then lending those funds to borrowers, charging interest for the service. This indirect provision of funds allows savers to earn a return on their savings while borrowers have access to the funds they need for investment or consumption.

Which Statement Best Defines Financial Intermediaries