Small Savers Would Rather Use Financial Institutions Than Lend Directly

question 75

Multiple Choice

Small savers would rather use financial institutions than lend directly to borrowers because:

• A)Financial institutions will offer the savers higher interest rates than the savers could obtain directly from borrowers
• B)Lenders wouldn't want to deal with small savers
• C)Savers prefer to share risk
• D)The liquidity is lower with financial institutions but the return is higher

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Definitions:

Goods in Transit

Items that have been shipped by a seller but have not yet been received by the buyer.

Days' Sales in Inventory

A measure of how quickly inventory is sold and replaced over a period, calculated by dividing the ending inventory by the cost of goods sold and multiplying by 365.

Year 2

Typically refers to the second year in a given time frame or study period, often used in financial analysis, forecasts, or planning scenarios.

Ending Inventory Balance

The value or quantity of goods available for sale or use at the end of an accounting period, after accounting for purchases and sales during the period.