Which of the following statements is FALSE regarding financial intermediaries? A. A stock broker acts as...

Which of the following statements is FALSE regarding financial intermediaries?

A. A stock broker acts as a financial intermediary by bringing together buyers and sellers of stocks.

B. A financial advisor is a financial intermediary since he/she gives financial advice to households regarding saving for retirement.

C. Banks and credit unions are a financial intermediaries since they act as a middle man between households wanting to borrow and those wanting to lend .

D. Investment companies act as a financial intermediary by pooling investors' funds enabling those with smalls sums of money to obtain diversified portfolios.

E. Insurance companies act as financial intermediaries by pooling risk amongst households thereby reducing the cost of insuring such risks.

Solutions

Expert Solution

Answer:

Broadly,Financial intermediary is a third party facilitates a transactions between a borrower and a lender.Accordigly,financial advisor who gives financial advice to households regarding saving for retirement cannot be considered as financial intermediary.Thus correct answer is Option B

All the remaining options are true regarding financial intermediaries.

jeff jeffy answered 2 years ago

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