Financial Instruments Are Used to Channel Funds From

question 91

Multiple Choice

Financial instruments are used to channel funds from:

• A) savers to borrowers in financial markets and via financial institutions.
• B) savers to borrowers in financial markets but not through financial institutions.
• C) borrowers to savers in financial markets but not through financial institutions.
• D) borrowers to savers through financial institutions, but not in financial markets.

---

Definitions:

Interest Rates

The percentage charged or paid for the use of money, typically expressed as an annual rate provided by lenders to borrowers.

Bond Prices

The market cost of bonds, which can fluctuate based on interest rate movements, credit quality, and other factors.

Retractable Bonds

Bonds that provide the holder the option to redeem them at a predetermined price before maturity, potentially at par value or a slight premium.

Interest Rates

The fee, shown as a percentage of the total amount loaned, that a lender imposes on a borrower for the right to use their funds.