Question 3:

Financial intermediaries

1. borrow funds from savers and lend them to investors, thereby facilitating the investment process.

2. borrow funds by selling debt instruments whose principal and interest are fixed in nominal dollars and lend them by acquiring equity shares in firms.

3. borrow funds by selling long-term bonds and lend them by purchasing short-term debt instruments.

4. do any or all of the above.

Choose the correct option.