Question

‘It is a process that allocates or directs funds available for investment into their most productive instrument opportunity’.

This is known as: 

Options

• Financial planning

• Financial Intermediation

• Allocative function

• Capital budgeting

Answer 1

Allocative function

Explanation: 

Through the mobilization of cash between investors and savers, a financial market promotes the connection between the two groups. It carries out what is referred to as an allocative function in the process.