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Financial intermediaries (FIs) can offer savers a safer, more liquid investment than a capital market security, even though the intermediary invests in risky illiquid instruments

Financial intermediaries (FIs) can offer savers a safer, more liquid investment than a capital market security, even though the intermediary invests in risky illiquid instruments because

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-FIs closely monitor the riskiness of their assets.

-FIs can diversify away some of their risk.

-FIs can diversify away some of their risk and the federal government requires them to do so.

-FIs can diversify away some of their risk and closely monitor the riskiness of their assets.

-the federal government requires them to do so.

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