Financial markets allow for all but which one of the following?

a. shift consumption through time from higher-income periods to lower

b. price securities according to their riskiness

c. channel funds from lenders of funds to borrowers of funds

d. allow most participants to routinely earn high returns with low risk

Question

Business

Jayden Henry

16 June, 14:05

Financial markets allow for all but which one of the following?

a. shift consumption through time from higher-income periods to lower

b. price securities according to their riskiness

c. channel funds from lenders of funds to borrowers of funds

d. allow most participants to routinely earn high returns with low risk

+2

Answers (2)

Know the Answer?

Fury · Answer 1

d. allow most participants to routinely earn high returns with low risk

Explanation:

In the financial markets there is always an element of risk in transactions. Generally speaking the higher the risk the higher the gain.

Low risk instruments have low returns on investment. Even for these low risk assets sometes the risk can be high for example if a client has a fixed deposit with a bank, and the bank liquidated. The client may not get his full funds invested back.

High risk markets like the forex market has one of the highest returns on investment, but high risk can also make an investor lose substantially.

Madilynn · Answer 2

Answer:c

Explanation: financial markets provide the economy with liquidity. Therefore it forms a channel to create capital for businesses as well as the government and in turn allows for the flow of funds between borrowers and lenders.