Which of the following illustrates the function of the financial market?(1 point)
Responses
Saved funds are transferred to lenders through the sale of newly-issued securities.
Saved funds are transferred to lenders through the sale of newly-issued securities.
Saved funds are transferred to borrowers via the sale of newly-issued securities.
Saved funds are transferred to borrowers via the sale of newly-issued securities.
Saved funds are transferred to lenders via the issuing of bank loans.
Saved funds are transferred to lenders via the issuing of bank loans.
Saved funds are transferred to borrowers via the issuing of bank loans.
Saved funds are transferred to borrowers via the sale of newly-issued securities.
The correct answer is:
Saved funds are transferred to borrowers via the sale of newly-issued securities.
The function of the financial market is to facilitate the transfer of saved funds from lenders to borrowers. This is accomplished through the sale of newly-issued securities or the issuing of bank loans. In this case, we need to determine which option illustrates the function of the financial market.
Option 1: "Saved funds are transferred to lenders through the sale of newly-issued securities." This option correctly describes the transfer of funds from savers to lenders through the sale of securities.
Option 2: "Saved funds are transferred to borrowers via the sale of newly-issued securities." This option incorrectly states that funds are transferred to borrowers through the sale of securities, which is not the function of the financial market.
Option 3: "Saved funds are transferred to lenders via the issuing of bank loans." This option incorrectly describes the transfer of funds to lenders through bank loans, which is not the function of the financial market.
Option 4: "Saved funds are transferred to borrowers via the issuing of bank loans." This option incorrectly states that funds are transferred to borrowers through bank loans, which is not the function of the financial market.
Therefore, the correct answer is Option 1: "Saved funds are transferred to lenders through the sale of newly-issued securities."