What is the primary function of a financial market?

The primary function of a financial market is to facilitate the fair and efficient transfer of funds between savers and borrowers. This function is essential for the overall economy because it allows individuals and institutions with excess funds (savers) to lend these funds to those in need of capital (borrowers), whether for business expansion, personal loans, or investment in projects.

Financial markets not only enable this flow of money but also help in setting prices for financial assets through supply and demand dynamics. By providing a platform where buyers and sellers can transact, these markets create liquidity, which ensures that funds can be accessed quickly and efficiently. This efficient allocation of resources ultimately contributes to economic growth and stability.

The other options indicate various roles related to finance but do not encapsulate the core purpose of financial markets. While providing credit to consumers and regulating interest rates are indeed important aspects of the broader financial system, they do not represent the fundamental function of financial markets themselves. Similarly, offering investment advice is a service provided by financial advisors, but it is not a primary function of financial markets. Thus, the correct answer reflects the essential role that financial markets play in connecting savers and borrowers directly.