. Direct financing allows a borrower to: A. easily assess a lender’s level of default risk B. diversify their funding sources C. match amounts and maturity of investments with borrowers D. lower search and transaction costs

. Direct financing allows a borrower to: A. easily assess a lender’s level of default risk B. diversify their funding sources C. match amounts and maturity of investments with borrowers D. lower search and transaction costs

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 13MC

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Concept explainers

Flow of Funds

The flow of funds is the financial accounts of the nation, which monitor and control the cash flow among various sectors or industries, or markets. Central banks use these flow of funds statements to acquire macroeconomic data, to publish cash inflow and cash outflow statements of the nation. This flow of funds system is utilized to identify economic activity and changes in the economy. It is used by Federal Reserve to determine the Gross Domestic Product (GDP) of the nation and to implement monetary policy and fiscal policies.

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41. Direct financing allows a borrower to: A. easily assess a lender’s level of default risk B. diversify their funding sources C. match amounts and maturity of investments with borrowers D. lower search and transaction costs

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