Business, 10.03.2020 18:06 jeanniebyrd54

The chapter discusses three main functions of a banking system Classify each of the following by the function it best represents.

a. Aaron can get cash out of the ATM at any time of day or night.

a. Diversify risk.
b. Intermediate between savers and borrowers.
c. Provide liquidity,

b. Instead of lending all her savings out to one borrower, Barbara?s bank makes the money In her savings account available to a variety of firms, with different characteristics and risk profiles, wishing to invest.

a. Provide liquidity.
b. Intermediate between savers and borrowers.
c. Diversify risk.

c. When Charlies car suddenly breaks down, he can quickly withdraw funds from his savings account to pay the mechanic and rent a car.

a. Provide liquidity.
b. DiversIfy risk.
c. Intermediate between savers and borrowers.

d. Donna can get start-up funds for her new hair salon from a bank, Instead of having to find people In her neighborhood willing to lend their extra money.

a. Diversify risk.
b. Intermediate between savers and borrowers.
c. Provide liquidity.

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The chapter discusses three main functions of a banking system Classify each of the following by the...

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