Question

Statement I: A financial market facilitates the transfer of savings from savers to investors.

Statement II: It gives savers the choice of different investments and helps to channelise surplus funds into the most productive use. 

Options

• Statement I is true and Statement II is false.

• Statement II is true and Statement I is false.

• Both the Statements are true.

• Both the Statements are false.

Answer 1

Both the statements are true.

Explanation:

1. Statement I is true because a financial market promotes money transfer from savers to investors, allowing cash to be spent productively.
2. Statement II is also valid since a financial market offers savers a variety of investment options and aids in effectively allocating surplus assets to the most productive purposes.