FIs Perform Their Intermediary Function in Two Ways

question 33

Multiple Choice

FIs perform their intermediary function in two ways:

• A)They specialise as brokers between savers and users and they directly control the quantity of outside money in the economy.
• B)They serve as asset transformers by purchasing primary securities and issuing secondary securities and by purchasing secondary securities and issuing primary securities.
• C)They serve as asset transformers by purchasing secondary securities and issuing primary securities and they directly control the quantity of outside money in the economy.
• D)They specialise as brokers between savers and users and they serve as asset transformers by purchasing primary securities and issuing secondary securities.

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Definitions:

Direct Costs

Costs that are directly attributable to the production of goods or provision of services, such as raw materials and direct labor.

Indirect Costs

Costs that are not directly attributable to the production of goods or services and cannot be traced back to a single product, service, or project, such as rent and utilities.

Responsibility Accounting System

An accounting framework that tracks financial performance by specific areas of responsibility, such as departments or managers.

Managers' Performance

Refers to the assessment and evaluation of the effectiveness and efficiency with which managers achieve business objectives and goals.