Which of the Following Statements Is Most Correct

question 21

Multiple Choice

Which of the following statements is most correct?

• A) Financial intermediaries are banks.
• B) A bank is a financial intermediary.
• C) Financial intermediaries are insurance companies.
• D) Financial intermediaries are essential to direct finance.

---

Definitions:

Profit Margin

A financial metric that measures the amount of net income generated as a percentage of revenue.

Full Cost

The total cost associated with producing a product or providing a service, including both direct and indirect costs.

Contribution Margin

The amount by which the sale of products or services exceeds variable costs, contributing to the coverage of fixed costs and profit generation.

Machine Hour

A unit of measure representing an hour of operation of a machine, used in calculating the cost of running machinery for manufacturing.