It Is Generally Agreed That

question 73

Multiple Choice

It is generally agreed that

• A)the financial system would be more efficient if intermediaries were eliminated.
• B)the economy benefits from the growth generated by intermediaries.
• C)the addition of intermediaries adds to transactions costs.
• D)intermediaries should not seek to profit from reducing transactions costs.

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Definitions:

Selling Price

The amount of money for which a product or service is sold to the customer.

Principal

An individual or entity that authorizes an agent to act on their behalf in legal or financial matters.

NPV Criterion

A financial metric used to assess the profitability of an investment, calculating the net present value of all cash flows associated with it.

Future Cash Flows

Estimates of the amount of money expected to be received or paid out in the future through investment, business operations, or other financial activities.