Which of the Following Is NOT a Possible Disadvantage of Direct

question 38

Multiple Choice

Which of the following is NOT a possible disadvantage of direct financing?

• A) Matching amounts of funds to be borrowed with those to be lent
• B) Assessment of the risk of the borrower
• C) Cost of preparing legal contracts, taxation and accounting advice
• D) Cost of the financial intermediary involved

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Definitions:

Expected Profit

The anticipated financial gain from an investment or business venture, taking into account both potential earnings and losses.

Electronics Company

A business involved in the manufacturing, designing, and/or selling of electronic devices and components.

Independent Events

Two or more events whose outcomes are not affected by each other, meaning the occurrence of one event does not influence the occurrence of the other.

Golf Balls

Small, dimpled balls designed and constructed for use in the game of golf, optimized to fly far and straight when struck by golf clubs.