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nancial intermediaries:Group of answer choicesCapture value but create none.Do not include investment banks.Do not include commercial banks.Facilitate the flow of funds.Include neither invesment banks nor commercial banks.

Question

nancial intermediaries:Group of answer choicesCapture value but create none.Do not include investment banks.Do not include commercial banks.Facilitate the flow of funds.Include neither invesment banks nor commercial banks.

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Solution

Financial intermediaries facilitate the flow of funds. They play a crucial role in the economy by connecting surplus and deficit economic agents. This group includes both investment banks and commercial banks.

Investment banks help companies and governments raise capital by issuing and selling securities in the primary market. They also assist public and private corporations in raising funds in the capital markets (both equity and debt), as well as in providing strategic advisory services for mergers, acquisitions and other types of financial transactions.

Commercial banks, on the other hand, accept deposits and make loans, thereby facilitating the flow of money in the economy. They provide a range of services including checking accounts, savings accounts, and business loans.

So, financial intermediaries do not only capture value but also create it by enabling these transactions and services. Therefore, the statement "Financial intermediaries facilitate the flow of funds" is correct.

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