Economics · Financial Markets
What is a primary objective of developing a resilient and efficient corporate bond market in an economy?
- 1To provide short-term highly liquid instruments exclusively for retail day traders.
- 2To lower funding costs for corporations by reducing intermediation costs and providing an alternative source of long-term capital.✓
- 3To decrease the absolute number of institutional investors in the market to enhance stability.
- 4To replace equity financing completely as a source of capital for all enterprises.
Correct answer
To lower funding costs for corporations by reducing intermediation costs and providing an alternative source of long-term capital.
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