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Question
Justify the following statement.
Financial markets acts as link between investor and borrower.
Solution
- The financial market provides a platform where both, buyers and sellers can find each other easily.
- Investors who have savings are linked with entrepreneurial borrowers that require investment.
- As a result, the idle funds in the hands of investors can be productively used by corporates.
- This market enables investors to invest their saving according to their choices and risk assessment.
- Hence, financial markets acts as link between investor and borrower.
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