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Question

Which of the following statements is true with regard to financial markets?


A

They work as an intermediary between the savers and the investors by mobilising funds between them.

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B

They allocate funds available for investment into their most productive investment opportunity.

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C

They link the households which save funds and business firms which invest these funds.

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D

All of the above.

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Solution

The correct option is D

All of the above.


Answer (d) All of the above

Explanation: A financial market is a market wherein individuals exchange financial derivatives and securities at low exchange costs. A few of the securities incorporate bonds and stocks, precious metals, and raw materials, which are referred to as commodities in financial markets.


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