Question
Business Studies Question on Financial Markets
Identify the function performed by Financial Market from the following statement: "Holders of assets can readily sell their financial assets through the mechanism of the financial market."
A
Reduce the cost of transactions
B
Provide liquidity to assets
C
Facilitate price discovery
D
Mobilization of savings
Answer
Provide liquidity to assets
Explanation
Solution
Financial markets provide liquidity by allowing holders to quickly sell assets, ensuring they can convert their holdings to cash without significant loss in value