Which of the following statements illustrates an example of how financial institutions' role as specialists in risk measurement and

management is reduced.

Multiple Choice

Many financial claims feature a long$-$term commitment for fund suppliers, creating a disincentive for fund suppliers to

hold direct financial claims that fund users may issue.

Once financial institutions have lent money in exchange for financial claims, fund suppliers would need to monitor the

use of their funds to guard against theft and waste.

Both statements are correct.

Neither statement is correct.