When savers invest through financial intermediaries, they are said to engage in

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When savers invest through financial intermediaries, it is known as indirect finance. In indirect finance, financial intermediaries such as banks, mutual funds, pension funds, insurance companies, etc., collect money from savers and use it to provide loans, invest in securities and assets, and engage in other financial activities. Direct finance, on the other hand, involves the issuance of securities directly to investors without the involvement of financial intermediaries. Secondary and tertiary markets relate to the buying and selling of securities after they have been issued and do not relate to the mode of investment.

When Savers Invest Through Financial Intermediaries, They Are Said to Engage