Final answer:
The correct answer to the question is 'principal,' which is the party that grants authority to an agent to act on their behalf in transactions with third parties.
Step-by-step explanation:
A person who authorizes another to act in his or her place regarding dealings with third parties is known as the principal. An intermediary, as illustrated in various examples, acts between two parties but does not necessarily have the authority to make decisions on behalf of one of them. In the context of financial capital markets, banks function as financial intermediaries by accumulating funds from savers and lending them to borrowers, without direct interaction between the two groups. An agent is a person who authorizes another to act in his or her place in regard to relations with third persons. They are authorized to act on behalf of the principal. For example, a real estate agent may be authorized by a homeowner to sell their property. In this situation, the homeowner is the principal and the real estate agent is the authorized agent acting on their behalf.