alleryThe process by which allocation of funds is done through banks or markets is called:
AFinancial arbitration
BFinancial intermediation
CFinancial speculation
DFinancial liquidation
Answer & Solution
Correct answer: B. Financial intermediation
1. Banks and markets compete for savings.
2. Both channel funds to firms.
3. That process is financial intermediation.
_Source: syllabus Business Studies Part II, Chapter 10, Financial Markets._
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