12 Questions
How do financial intermediaries help in reducing transaction costs?
By reducing the cost of information collection and analysis
Name one specific function of financial intermediaries.
Pooling funds
What is the main function of financial intermediaries?
To provide financial intermediary services
What is the role of financial intermediaries in providing liquidity?
To transform and provide liquidity to financial assets
What is meant by the term 'financial intermediaries'?
Entities that facilitate the flow of funds between savers and borrowers
How do financial intermediaries contribute to the efficient allocation of resources?
By channeling funds to productive investments
What is the impact of financial intermediaries on the availability of credit?
They increase the availability of credit in the economy
How do financial intermediaries help in risk diversification?
By pooling and spreading risks across a diversified portfolio
What is the significance of financial intermediaries in the financial system?
They enhance the efficiency and stability of the financial system
How do financial intermediaries promote economic growth?
By channeling funds to productive investments and borrowers
What is one way in which financial intermediaries contribute to the stability of the financial system?
By providing risk diversification
How do financial intermediaries facilitate the efficient transfer of funds?
By acting as middlemen between savers and borrowers
Study Notes
Functions of financial intermediaries
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