Financial Intermediaries Pool the Resources of Many Small Savers So

question 3

Multiple Choice

Financial intermediaries pool the resources of many small savers so that they can:

• A) charge fees to these small savers and earn substantial income.
• B) obtain the funds necessary to make loans to borrowers seeking large amounts.
• C) lower their transaction costs of obtaining funds.
• D) avoid paying any interest to obtain funds to lend.

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Definitions:

Risk Taking

The act of engaging in behaviors or decisions that have the potential for negative consequences but are pursued for potential positive outcomes.

Need To Belong

An innate human desire to form and maintain strong, stable relationships with others.

Interpersonal Contact

Direct interaction between two or more individuals, involving communication or physical presence.

Relationships

Connections between individuals or groups characterized by emotional or social linkage, and interactions that can influence behavior and well-being.