Identify the function performed by Financial Market from the following statement: ”Holders of assets can readily sell their financial assets through the mechanism of the financial market.”

The correct option is: Provide liquidity to financial assets

Step-by-Step Explanation:

1. Understanding the statement: The statement says: "Holders of assets can readily sell their financial assets through the mechanism of the financial market." This highlights the ease and speed with which an investor can convert their financial assets (like shares, bonds, debentures, etc.) into cash or cash equivalents.

2. Defining Liquidity: In finance, "liquidity" refers to the ability to convert an asset into cash quickly and without a significant loss in its value. A market that allows assets to be bought and sold easily is said to provide liquidity.

3. Analyzing the Options:
- Provide liquidity to financial assets: This function ensures that financial assets can be easily bought and sold, converting them to cash whenever needed. This directly aligns with the statement "readily sell their financial assets."
- Reduce the cost of transactions: This function saves time, effort, and money for buyers and sellers by providing a common platform, but it doesn't directly describe the act of readily selling assets.
- Facilitate price discovery: This function helps in determining the price of financial assets through the forces of demand and supply.
- Mobilisation of savings and channelling them into the most productive uses: This function facilitates the transfer of savings from savers to investors/borrowers.

Therefore, the statement specifically describes the function of providing liquidity to financial assets.