(b) Why are capital markets regarded as financial intermediaries? State.

Question

Accepted Answer

Capital markets are regarded as **financial intermediaries** because they perform the role of transferring financial resources from surplus units (people who have savings and do not want to spend) to deficit units (entrepreneurs who need funds for economic activities). They act as a bridge between savers and borrowers by mobilizing individual savings and making them readily available to those who need them in industry, trade, finance, and government.