Financial markets :a. determine tax rates. b. increase transactions costs. c. reduce diversification. d. are the same as resource markets. e. provide liquidity.

Financial market describes any manner in which buyers and sellers meet for trading assets, usually financial securities such as stocks, bonds currencies, options, and derivatives. Financial markets are a cornerstone of the capitalist economy because they assist entrepreneurs and businesses in facilitating capital formation and liquidity.

Financial markets create liquidity by making the trading of financial holdings easy for buyers and sellers without the need of a physical market.

Tundexi Tundexi · Answer 2 · 2022-03-25T12:43:41+01:00

The Financial markets create liquidity by making the trading of financial holdings easy for buyers and sellers

What is a Financial market?

Financial market refers to a financial market is a market that allows buyers and sellers to meet for trading assets.

These markets is the cornerstone of an economy because its assist entrepreneurs and businesses in facilitating capital formation and liquidity.

Hence, the markets create liquidity by making the trading of financial holdings easy for buyers and sellers without the need of a physical market.

Therefore, the Option E is correct.