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are examples of financial intermediaries.A. Commercial banks B. Insurance companies C. Investment companies D. All of the above.

Question

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Solution

Understanding Financial Intermediaries

Financial intermediaries play a crucial role in the economy by facilitating the flow of funds between savers and borrowers. They include institutions that provide services to channel funds from individuals or entities who have surplus funds to those who need funds.

Analyzing the Options

  1. Commercial Banks: These institutions accept deposits from individuals and businesses and provide loans and credit to borrowers. They serve as a primary example of financial intermediaries.

  2. Insurance Companies: They collect premiums from policyholders and, in return, provide insurance coverage. The collected premiums are then invested to generate income, making them intermediaries as well.

  3. Investment Companies: These firms pool money from many investors to purchase securities. They mobilize funds from investors and allocate them to various investment opportunities, also fitting the definition of financial intermediaries.

Conclusion

Since all the listed options serve as financial intermediaries, the correct answer is:

Final Answer

D. All of the above.

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