The Difference Between a Financial Forecast and a Financial Projection

question 35

True/False

The difference between a financial forecast and a financial projection is that a forecast provides information on what is expected to happen, while a projection provides information on what might take place but is not necessarily expected to happen.

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Definitions:

Financial Intermediaries

Institutions that act as middlemen in financial transactions, assisting in channeling funds from savers to borrowers, such as banks, insurance companies, and pension funds.

Commercial Banks

Financial institutions that accept deposits, offer checking account services, and make loans to individuals and businesses.

Insurance Companies

Insurance companies are financial institutions that provide coverage by pooling risks and compensating covered losses in areas such as life, health, and property.

Investment Companies

Firms that pool funds from investors to collectively invest in stocks, bonds, and other securities, offering diversification and professional management.