Scenario Two years ago, Larry started a new business. Now he needs additional capital to finance additional growth and is meeting with a group of "angel" investors. If they decide to make the loan, they will do so without the use of a middleman or other intermediary. Wellington Industries would like to borrow additional debt capital. The company has hired a firm to assist in the sale of a new issue of 10-year bonds. Anderson Animations, Inc. holds cash balances in an institution that, in turn, loans out the funds to other individuals and companies. Direct Transfer O Indirect Transfer through an Investment Banking House O Indirect Transfer through a Financial Intermediary

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Identify which fund transfer process each scenario best represents.
Scenario
Two years ago, Larry started a new business. Now he needs additional
capital to finance additional growth and is meeting with a group of "angel"
investors. If they decide to make the loan, they will do so without the use
of a middleman or other intermediary.
Wellington Industries would like to borrow additional debt capital. The
company has hired a firm to assist in the sale of a new issue of 10-year
bonds.
Anderson Animations, Inc. holds cash balances in an institution that, in
turn, loans out the funds to other individuals and companies.
Direct
Transfer
O True
False
O
O
O
Indirect Transfer
through an
Investment Banking
House
O
Indirect Transfer
through a Financial
Intermediary
True or False: The existence of financial middlemen and financial intermediaries decreases the efficiency of the financial markets.
Transcribed Image Text:Identify which fund transfer process each scenario best represents. Scenario Two years ago, Larry started a new business. Now he needs additional capital to finance additional growth and is meeting with a group of "angel" investors. If they decide to make the loan, they will do so without the use of a middleman or other intermediary. Wellington Industries would like to borrow additional debt capital. The company has hired a firm to assist in the sale of a new issue of 10-year bonds. Anderson Animations, Inc. holds cash balances in an institution that, in turn, loans out the funds to other individuals and companies. Direct Transfer O True False O O O Indirect Transfer through an Investment Banking House O Indirect Transfer through a Financial Intermediary True or False: The existence of financial middlemen and financial intermediaries decreases the efficiency of the financial markets.
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