Name and Briefly Describe the Difference Between Centralization and Decentralization

question 9

Essay

Name and briefly describe the difference between centralization and decentralization.

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Definitions:

Financial Intermediation

The process by which financial institutions act as intermediaries between lenders and borrowers.

Institutional Investor

A business organization that buys and sells securities. Generally, a fund of some kind such as a mutual fund or a pension fund that invests the pooled money of its clients.

Pension Funds

Investment pools that collect and invest funds contributed by sponsors and beneficiaries to provide future pension benefits.

Insurance Companies

Businesses that provide protection against financial losses in exchange for regular payments from individuals or entities.