Solved: A financial intermediary that provides liquid financial assets in the form of

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QUESTION:

A financial intermediary that provides liquid financial assets in the form of deposits to lenders and uses their funds to finance borrowers investment spending on illiquid assets is called a a. mutual fund. b. bank. c. corporation. d. pension fund. e. life insurance company

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QUESTION:

A financial intermediary that provides liquid financial assets in the form of deposits to lenders and uses their funds to finance borrowers investment spending on illiquid assets is called a a. mutual fund. b. bank. c. corporation. d. pension fund. e. life insurance company

ANSWER:

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Liquid financial assets are those assets that can be converted to cash, and an example of them is marketable securities. On the other hand, illiquid assets are those assets that cannot be easily converted to cash, and an example of them is stocks.

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