Answered

Which of the following is NOT one of the four functions of depository institutions that we discussed in class?

A. Create liquidity
B. Reduce the cost of monitoring borrowers
C. Pool risk
D. Facilitate capital gains



Answer :

GinnyAnswer

Final answer:

Depository institutions perform essential functions like creating liquidity, monitoring borrowers, and pooling risk, but they do not facilitate capital gains.


Explanation:

Facilitate capital gains is NOT one of the four functions of depository institutions. The functions discussed include creating liquidity, reducing the cost of monitoring borrowers, and pooling risk. Depository institutions, such as banks, play a crucial role in converting short-term deposits into long-term loans and mitigating risk through diversification.


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