Banks
A)play a role in creating an asset that people can use as a medium of exchange.
B)are financial intermediaries,but mutual funds are not financial intermediaries.
C)are financial markets,as are bond markets.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Banks create deposits in the process of making loans, which can be used as a medium of exchange. Therefore, they play a role in creating an asset that people can use as a medium of exchange.

Answer: D
 Banks are financial intermediaries that connect borrowers and lenders, and they also create deposits that serve as a medium of exchange. Mutual funds are also financial intermediaries, but they do not create deposits. Bond markets are a type of financial market where debt securities are bought and sold, just like banks also operate in financial markets. Therefore, all of the above statements are correct.