The Existence of Financial Intermediaries Greatly Increases the Efficiency of Financial

question 40

True/False

The existence of financial intermediaries greatly increases the efficiency of financial markets because, without them, savers would have to provide funds directly to borrowers, which would be a much costlier process.

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Definitions:

Indirect Method

A cash flow statement preparation approach that adjusts net income for changes in non-cash accounts to calculate cash flow from operating activities.

Cash Flows

The overall volume of cash inflows and outflows within a corporation, impacting its availability of liquid funds.

Free Cash Flow

A financial metric that measures the amount of cash generated by a company after accounting for capital expenditures.

Net Income

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue, indicating financial performance.