In: Finance
Financial intermediaries affect the availability of credit through all EXCEPT which of the following?
A) risk sharing among savers.
B) reducing transactions costs.
C) collecting information to mitigate asymmetric information problems D) allowing savers to conduct direct finance transactions.
Answer:
Correct answer is:
D) allowing savers to conduct direct finance transactions
Explanation:
Financial Intermediaries facilitates indirect finance since they get deposits from savers and in turn they (Financial intermediaries) finance entrepreneurs /companies who need finance. As such financial intermediaries affect the availability of credit by allowing savers to conduct indirect finance transactions.
Financial intermediaries affect the availability of credit through:
As such option D is correct and other options A, B and C are incorrect