Discussion
Functions of financial markets are:
(i) To facilitate creation and allocation of credit and liquidity
(ii) To serve as intermediaries for mobilisaton of savings
(iii) To assist the process of balanced economic growth
(iv) To provide financial convenience
Answer: D
All four are functions of financial markets. They help to create and allocate credit and liquidity in the economy, they serve as intermediaries by mobilising the savings of households and passing them to those who invest, they help the process of balanced economic growth by channelling funds to productive uses, and they provide financial convenience such as information and low transaction costs. As all four are listed in the key, an option with fewer items is incomplete.
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