FIs Perform Their Intermediary Function in Two Ways

question 86

Multiple Choice

FIs perform their intermediary function in two ways

• A)they specialize as brokers between savers and users.
• B)they serve as asset transformers by purchasing primary securities and issuing secondary securities.
• C)they serve as asset transformers by purchasing secondary securities and issuing primary securities.
• D)they specialize as brokers between savers and users and they serve as asset transformers by purchasing primary securities and issuing secondary securities.
• E)they specialize as brokers between savers and users and they serve as asset transformers by purchasing secondary securities and issuing primary securities.

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Definitions:

Obsolete

No longer produced or used; out of date.

Bushels of Wheat

A measurement unit for volume, commonly used in agriculture, representing the quantity of wheat.

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Insolvent Buyer

An individual or entity that cannot meet financial obligations or pay debts as they become due.