Economics · Financial Intermediation
Which of the following best describes 'default-risk intermediation'?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Borrowing short-term funds from savers and making long-term loans to borrowers.
- 2Making loans to risky borrowers by attracting savings from savers who are risk-averse.✓
- 3Using specialized information gathering skills of the intermediary.
- 4Pooling small amounts of savings from individuals to give large loans to corporate borrowers.
Correct answer
Making loans to risky borrowers by attracting savings from savers who are risk-averse.
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