Question

Financial Institutions are not merely transactional entities but key architects of economic progress. Their roles also span in
(A) Capital formation
(B) Risk management
(C) Inclusive finance
(D) Arbitration
(E) Consultation in project report preparation to intern during their internship program.
Choose the correct answer from the options given below :

• A. (A) and (B) only
• B. (A), (B) and (C) only
• C. (B), (C) and (D) only
• D. (B), (C), (D) and (E) only

Hint:

Eliminate options that describe purely administrative or legal tasks when asked about "architects of economic progress". Arbitration and intern consulting are clearly out of place here.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
Financial institutions (like banks, investment firms) perform systemic roles that impact the macro-economy.
Step 2: Detailed Explanation:
1. Capital Formation (A): By mobilizing savings and directing them into investments, these institutions build the capital of a nation. This is a core role.
2. Risk Management (B): Through insurance, hedging, and diversified lending, they manage and distribute financial risks. This is a core role.
3. Inclusive Finance (C): Modern financial institutions work towards financial inclusion—bringing banking services to the unbanked and marginalized sections. This is a core role.
4. Arbitration (D): Arbitration is a legal process for settling disputes outside of court. It is a role of legal bodies or specialized mediators, not a standard economic role of financial institutions.
5. Consultation (E): Helping an intern with a project report is a minor administrative task, not a macro-economic "architectural" role of a financial institution.
Step 3: Final Answer:
Only (A), (B), and (C) represent the significant economic roles mentioned in the question prompt.