Question

If you were going to get a loan to purchase a new car, which financial intermediary would you use: a credit union, a pension fund, or an investment bank?

Short answer

The consumer will choose pension fund as a priority for buying new car

Step-by-step solution

Step 1. Introduction

A economic middleman is an entity that acts because the intermediary among events in a economic transaction, together with a business bank, funding bank, mutual fund, or pension fund.

Step 2. Explanation

To buy a car there are number of financial intermediaries are available in the market. Thus, when a consumer has its own financial deposit he/she should first consider it instead of looking for third party financial help. Hence, Pension fund will be used to buy a car. If there is no pension fund with consumer, the consumer will go for other available option.