A Bank Lending Depositors' Money to a Local Business and a Pension

Multiple Choice

A bank lending depositors' money to a local business and a pension fund investing contributions in shares of a company are similar financial activities in that

A) both involve the use of financial markets.
B) both involve funds being channeled from savers to borrowers through financial intermediaries.
C) both involve a reduction in the overall level of liquidity in the financial system.
D) both involve in an increase in the overall level of risk in the financial system.