Which of these displays the function of the financial market?(1 point)
Responses
Saved funds are transferred to borrowers via the sale of newly-issued securities. Companies receive money from selling stocks to investors.
Saved funds are transferred to borrowers via the sale of newly-issued securities. Companies receive money from selling stocks to investors.
Receiving bank loans
Receiving bank loans
interest paid on a saving account
interest paid on a saving account
Providing bank loans
Providing bank loans
The correct answer is:
Saved funds are transferred to borrowers via the sale of newly-issued securities. Companies receive money from selling stocks to investors.
The correct answer is: Saved funds are transferred to borrowers via the sale of newly-issued securities. Companies receive money from selling stocks to investors.
To determine the correct answer, we can evaluate each response and see if it aligns with the function of the financial market.
Option 1: Saved funds are transferred to borrowers via the sale of newly-issued securities. Companies receive money from selling stocks to investors.
This option accurately describes one of the primary functions of the financial market. Individuals save their funds, which are then transferred to borrowers through the sale of securities, such as stocks. Companies receive money by selling stocks to investors. This process helps facilitate the allocation of funds from savers to borrowers.
Option 2: Receiving bank loans
While bank loans are a part of the financial market, they do not fully represent its function. The financial market involves various activities beyond just receiving bank loans.
Option 3: Interest paid on a savings account
Interest paid on a savings account is not the primary function of the financial market. It represents the return on saving deposits, but it doesn't encompass the broader role of the financial market in facilitating the flow of funds between savers and borrowers.
Option 4: Providing bank loans
While providing bank loans is a component of the financial market, it does not encompass its complete function. The financial market involves various entities and activities beyond just providing bank loans.
Based on the above evaluation, the first option accurately describes the function of the financial market, making it the correct answer.