2, 3 and 5
1, 2 and 4
1, 3 and 5
2, 3 and 4
Answer is Right!
Answer is Wrong!
The correct answer is B. 1, 2 and 4.
A financial system is a system that allows people to exchange money and other financial assets. It includes the institutions, markets, and instruments that facilitate the transfer of money between buyers and sellers.
The functions of a financial system are to:
- Provide a means of payment. This allows people to buy and sell goods and services without having to carry around large amounts of cash.
- Channel funds from savers to investors. This allows businesses to raise money to invest in new projects, and individuals to save for retirement or other goals.
- Provide a means of risk management. This allows people to protect themselves against financial losses, such as those caused by changes in interest rates or the stock market.
- Promote economic growth. By providing a way for businesses to raise money and individuals to save, a financial system can help to stimulate economic growth.
The options are:
- The operation of a payments system. This is a key function of a financial system, as it allows people to transfer money easily and efficiently.
- Provides the means of portfolio adjustment. This allows people to adjust their investment portfolios to reflect their changing needs and goals.
- Helping to reduce unemployment. This is not a direct function of a financial system, but a healthy financial system can help to create jobs by providing businesses with the capital they need to invest and expand.
- Channelizing funds between lenders and borrowers. This is a key function of a financial system, as it allows businesses and individuals to access the capital they need to invest and grow.
- Helping speculators to bet on price movements. This is not a core function of a financial system, but it is one that can be beneficial to some investors.
Therefore, the correct answer is B. 1, 2 and 4.