A Market-Oriented Financial System Is an Effective Mechanism for Channelling

question 157

Multiple Choice

A market-oriented financial system is an effective mechanism for channelling funds from savers to borrowers with productive investment opportunities because it

• A) reduces the risk faced by each saver.
• B) shifts the risk of investing from borrowers to savers.
• C) pools the costs of gathering information about prospective borrowers.
• D) diversifies the risk of investing.
• E) facilitates the direct lending of funds by savers to borrowers.

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