A well-functioning financial system does all of the following except:
A)foster economic growth by directing savings to its most productive use.
B)allocate risk among market participants.
C)eliminate systematic risk through diversification.
D)direct resources from savers to borrowers.

Question

Quizplus · Accepted Answer

A well-functioning financial system cannot eliminate systematic risk through diversification; systematic risk is inherent to the entire market and cannot be diversified away.

A Well-Functioning Financial System Does All of the Following Except