Through Risk-Sharing Activities,a Financial Intermediary ________ Its Own Risk and ________

question 40

Multiple Choice

Through risk-sharing activities,a financial intermediary ________ its own risk and ________ the risks of its customers.

• A) reduces; increases
• B) increases; reduces
• C) reduces; reduces
• D) increases; increases

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Definitions:

Convertible Bond

A type of bond that can be converted into a predetermined number of shares of the issuing company's stock.

Subscription Agreements

Legal agreements for the purchase of shares in a company, typically used in private placements, detailing the terms and conditions of the investment.

Incorporation Process

The legal procedure by which a business entity is formed as a corporation, involving registration with the state, drafting articles of incorporation, and meeting other regulatory requirements.

Capital

Financial assets or the financial value of assets, such as cash or goods, used by a company to fund its operations and facilitate its growth.