One Financial Intermediary in Our Financial Structure That Helps to Reduce

question 47

Multiple Choice

One financial intermediary in our financial structure that helps to reduce the moral hazard from arising from the principal-agent problem is the

• A)venture capital firm.
• B)money market mutual fund.
• C)pawn broker.
• D)savings and loan association.

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Definitions:

Systematic

Methodical in procedure or plan; carried out using step-by-step methods leading to predictable outcomes.

Service Life

The estimated period over which a fixed asset is expected to be usable by the entity, impacting its depreciation calculation.

Fair Value

The price at which an asset would be bought or sold in a fair transaction between willing parties.

Resale

Resale refers to the action of selling a product or asset to another party after it has been bought, often used in the context of goods bought for the purpose of selling them at a profit.