Final answer:
Financial intermediaries serve as conduits between savers and borrowers, minimizing transaction costs and facilitating the flow of funds in the economy. They include banks, credit unions, and other institutions that perform financial brokerage and asset transformation by pooling deposits and providing loans. The correct answer to the question is c) financial intermediaries.
Step-by-step explanation:
The entity that serves as a conduit between users and savers of funds, providing both a brokerage function and engaging in the asset transformation function are financial intermediaries. These institutions, like banks, operate between savers, who deposit money, and borrowers, who take out loans. By pooling funds from savers and allocating them to borrowers, financial intermediaries minimize transaction costs and facilitate the efficient flow of financial capital. They prioritize healthy businesses with sound prospects for loan repayment over those less likely to repay.
Among the given options, credit unions, financial markets, financial intermediaries, and hedge funds, the correct answer is c) financial intermediaries, which include a range of institutions such as banks, insurance companies, and pension funds that provide essential financial services to both depositors and borrowers.