Questions
BU.231.710.51.FA25 The Final Exam
Single choice
Which of the following is NOT one of the special functions thatfinancial institutions provide?
Options
A.Guaranteeing positive returns on all investments
B.Reducing monitoring costs for savers through delegated monitoring
C.Offering maturity intermediation services
D.Providing denomination intermediation services
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Step-by-Step Analysis
To tackle this question, I’ll evaluate what constitutes a 'special function' of financial institutions and then examine each option in that light.
Option 1: 'Guaranteeing positive returns on all investments.' This claim is inaccurate as a general function of financial institutions. Financial markets involve risk, and institutions cannot guarantee positive returns for every investment; doing so......Login to view full explanationLog in for full answers
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