26. ‘Intermediaries, by managing the deposits they receive, are able to make long-term loans while satisfying savers’ preferences for liquid claims.’ This statement is referring to which important attribute of financial intermediation? A. Asset transformation B. Credit risk transformation C. Maturity transformation D. Denomination transformation

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A:

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A: Person to person lending is not a way to tarnsfer savings form those who needs funds.

Q: None

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A: Answer: Option C is the correct answer. Because "Financial intermediaries did not absorb the risks".

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Flow of Funds

The flow of funds is the financial accounts of the nation, which monitor and control the cash flow among various sectors or industries, or markets. Central banks use these flow of funds statements to acquire macroeconomic data, to publish cash inflow and cash outflow statements of the nation. This flow of funds system is utilized to identify economic activity and changes in the economy. It is used by Federal Reserve to determine the Gross Domestic Product (GDP) of the nation and to implement monetary policy and fiscal policies.