BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Matching borrowers and lenders
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Bearing risk
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Managing retirement portfolios for large classes of employees
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All of the above are activities of financial intermediaries.
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Detailed explanation-1: -Answer and Explanation: The stock market, bond market, and banks are all financial intermediaries but the government is not. The government is not a financial intermediary but it has become involved in financial intermediation.
Detailed explanation-2: -Financial intermediaries move funds from parties with excess capital to parties needing funds. The process creates efficient markets and lowers the cost of conducting business. For example, a financial advisor connects with clients through purchasing insurance, stocks, bonds, real estate, and other assets.
Detailed explanation-3: -It does not provide a safekeeping service for those with excess funds.
Detailed explanation-4: -The institutions that are commonly referred to as financial intermediaries include commercial banks, investment banks, mutual funds, and pension funds.