The financial system is financial markets and financial intermediaries through which firms acquire funds from households....

The financial system is financial markets and financial intermediaries through which firms acquire funds from households. Which of the following are advantages the financial system offers for households?

Question 1 options:

	Consumption goods.
	Household services.
	The elimination of risk.
	Liquidity.
	Information.
	Risk-sharing.

Solutions

Expert Solution

Option D, E, F.

The financial system is a network of financial institutions that work together to enable the exchange of funds between households, lenders and borrower's.
The various advantages offered by the financial systems to households are :

Liquidity :- they provide liquidity so that the funds can be readily converted to cash.
Information :- they Provide accurate and precise information timely about the transactions.
Risk-sharing :- It allows the equal distribution of risks caused due to the uncertainty of an assets returns among all.

Rahul Sunny answered 2 years ago

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