Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 5R, Problem 5MCQ
To determine
The correct option that defines the financial intermediary that resells the shares of the stock portfolio.
Expert Solution & Answer
Answer to Problem 5MCQ
Option a is correct.
Explanation of Solution
Explanation for the correct option:
a.
There are various financial intermediaries such as banks, mutual funds, insurance companies, etc. Mutual funds are the financial intermediaries that create a portfolio of stocks to resell the shares. Therefore, option a is correct.
Explanation for incorrect options:
b.
Pension fund is also a financial intermediary which invests savings into stocks so that income distribution can be done at the time of retirement. Therefore, option b is incorrect.
c.
Loan backed by securities does not create a portfolio of stocks to resell the shares. Therefore, option c is incorrect.
d.
Bond broker deals in bond or debt instrument instead of reselling shares. Therefore, option d is incorrect.
e.
Depository institutions refer to the institutions such as banks that allow deposits from investors for saving purposes. Therefore, option e is incorrect.
Economics Concept Introduction
Financial system: Financial system refers to the system that facilitates the borrower to borrow capital and the investors to invest their savings in the financial market.
Chapter 5R Solutions
Krugman's Economics For The Ap® Course
Ch. 5R - Prob. 1MCQCh. 5R - Prob. 2MCQCh. 5R - Prob. 3MCQCh. 5R - Prob. 4MCQCh. 5R - Prob. 5MCQCh. 5R - Prob. 6MCQCh. 5R - Prob. 7MCQCh. 5R - Prob. 8MCQCh. 5R - Prob. 9MCQCh. 5R - Prob. 10MCQ
Ch. 5R - Prob. 11MCQCh. 5R - Prob. 12MCQCh. 5R - Prob. 13MCQCh. 5R - Prob. 14MCQCh. 5R - Prob. 15MCQCh. 5R - Prob. 16MCQCh. 5R - Prob. 17MCQCh. 5R - Prob. 18MCQCh. 5R - Prob. 19MCQCh. 5R - Prob. 20MCQCh. 5R - Prob. 21MCQCh. 5R - Prob. 22MCQCh. 5R - Prob. 23MCQCh. 5R - Prob. 24MCQCh. 5R - Prob. 25MCQCh. 5R - Prob. 1FRQCh. 5R - Prob. 2FRQCh. 5R - Prob. 3FRQCh. 5R - Prob. 1CTQCh. 5R - Prob. 2CTQCh. 5R - Prob. 3CTQCh. 5R - Prob. 4CTQ
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