Question : It gives savers the choice of different investments and thus helps to channelise surplus funds into the most productive use.Which function of financial market is highlighted in the given statement?
Option 1: Mobilization of savings and channeling them into the most productive uses.
Option 2: Facilitating price discovery
Option 3: Providing liquidity to financial assets
Option 4: Reducing the cost of transactions
Correct Answer: Mobilization of savings and channeling them into the most productive uses.
Solution : Financial market facilitates the transfer of savings from savers to investors. It provides the choice of different investment options to savers, which helps them to invest or channelise their surplus funds into most productive use.
Hence, option A is correct.
