Financial Markets and Intermediaries

question 67

Multiple Choice

Financial markets and intermediaries:

• A) channel savings to real investment.
• B) increase risks for businesses.
• C) generally reduce the liquidity of securities.
• D) prevent the transportation of cash across time.

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Definitions:

Internal Rate

This term is ambiguous without further context. It might refer to Internal Rate of Return (IRR), which is a method of calculating an investment's rate of return.

Cash Flows

The movement of money into and out of a business, project, or financial product.

Company's Cost

The total expenses incurred by a company in the production of goods or services, including materials, labor, and overhead.

Discounted Cash Flow

An analysis method used to estimate the value of an investment based on its expected future cash flows, adjusted for time value of money.