Asked by Brisa Sanchez on Jun 09, 2024
Verified
A financial intermediary sells shares in itself and invests the:
A) funds collectively on behalf of its investors.
B) shares with a fund manager.
C) funds exclusively on behalf of its shareholders.
D) shares with a broker.
Financial Intermediary
An institution that acts as a middleman between savers and borrowers, such as a bank or investment firm.
Fund Manager
An individual responsible for making investment decisions for a portfolio of securities, implementing investment strategies for a mutual fund or institutional investor.
Shareholders
Individuals or entities that own shares in a corporation and therefore have an ownership interest in the company.
- Understand the importance of financial markets and intermediaries in economic processes.
Verified Answer
MD
Mishumo DzhivhuhoJun 15, 2024
Final Answer :
A
Explanation :
A financial intermediary, such as a mutual fund or an exchange-traded fund (ETF), sells shares to investors and then pools the funds collected to invest in various securities such as stocks, bonds, and other financial instruments. The intermediary invests these funds collectively on behalf of all its investors, thus spreading their risk and providing diversification in their investment portfolios.
Learning Objectives
- Understand the importance of financial markets and intermediaries in economic processes.