Financial Intermediaries Handle a Larger Flow of Funds Than Do

question 90

Multiple Choice

Financial intermediaries handle a larger flow of funds than do primary markets primarily because financial intermediaries:

• A)Have a government-provided monopoly
• B)Have government-regulated prices, so there is little competition
• C)Can lower transaction costs and increase liquidity for savers
• D)Do not have to worry about information asymmetry

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Definitions:

Personnel Limitation

Constraints or restrictions related to the number or capabilities of staff available for a project or operation.

Net Present Value

A calculation used to evaluate the profitability of an investment, subtracting the present values of cash outflows from the present values of cash inflows.

Binary Variable

A variable that takes on one of exactly two possible values, typically represented or coded as 0 and 1.

Processes

A series of actions or steps taken in order to achieve a particular end, often referring to sequences in manufacturing or computation.