The comparison between direct and indirect finance. Concept Introduction: Direct Finance - In this system, the borrowers borrow directly from the financial market without intermediaries. Indirect Finance - In this system, the borrowers get the services indirectly through financial intermediaries.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 2, Problem 1LO

To determine

The comparison between direct and indirect finance.

Concept Introduction:

Direct Finance - In this system, the borrowers borrow directly from the financial market without intermediaries.

Indirect Finance - In this system, the borrowers get the services indirectly through financial intermediaries.

Expert Solution & Answer

Explanation of Solution

Direct and indirect finances are different in the sense that in the former, there is no place for financial intermediary and in the latter; the financial intermediary plays an important role. In direct financing, the finance can be done directly through the financial market whereas in indirect financing, the money deposited or invested by households and other economic agents is used to finance the borrowing requirements through financial intermediaries. In direct financing, often, interest rate is not paid but in indirect financing interest rate has to be paid because an intermediary is involved.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Use the following table to work Problems 5 to 9. Minnie's Mineral Springs, a single-price monopoly, faces the market demand schedule: Price Quantity demanded (dollars per bottle) 10 8 (bottles per hour) 0 1 6 2 4 3 2 4 0 5 5. a. Calculate Minnie's total revenue schedule. b. Calculate its marginal revenue schedule. 6. a. Draw a graph of the market demand curve and Minnie's marginal revenue curve. b. Why is Minnie's marginal revenue less than the price? 7. a. At what price is Minnie's total revenue maxi- mized? b. Over what range of prices is the demand for water from Minnie's Mineral Springs elastic? 8. Why will Minnie not produce a quantity at which the market demand for water is inelastic?

Don't give AI generated solution otherwise I will give you downward Give correct answer with explanation

Don't used Ai solution

Answer 2

Question

Chapter 2, Problem 1LO

To determine

The comparison between direct and indirect finance.

Concept Introduction:

Direct Finance - In this system, the borrowers borrow directly from the financial market without intermediaries.

Indirect Finance - In this system, the borrowers get the services indirectly through financial intermediaries.

Expert Solution & Answer

Explanation of Solution

Direct and indirect finances are different in the sense that in the former, there is no place for financial intermediary and in the latter; the financial intermediary plays an important role. In direct financing, the finance can be done directly through the financial market whereas in indirect financing, the money deposited or invested by households and other economic agents is used to finance the borrowing requirements through financial intermediaries. In direct financing, often, interest rate is not paid but in indirect financing interest rate has to be paid because an intermediary is involved.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 2, Problem 1LO

To determine

The comparison between direct and indirect finance.

Concept Introduction:

Direct Finance - In this system, the borrowers borrow directly from the financial market without intermediaries.

Indirect Finance - In this system, the borrowers get the services indirectly through financial intermediaries.

Expert Solution & Answer

Explanation of Solution

Direct and indirect finances are different in the sense that in the former, there is no place for financial intermediary and in the latter; the financial intermediary plays an important role. In direct financing, the finance can be done directly through the financial market whereas in indirect financing, the money deposited or invested by households and other economic agents is used to finance the borrowing requirements through financial intermediaries. In direct financing, often, interest rate is not paid but in indirect financing interest rate has to be paid because an intermediary is involved.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 2, Problem 1LO

To determine

The comparison between direct and indirect finance.

Concept Introduction:

Direct Finance - In this system, the borrowers borrow directly from the financial market without intermediaries.

Indirect Finance - In this system, the borrowers get the services indirectly through financial intermediaries.

Expert Solution & Answer

Explanation of Solution

Direct and indirect finances are different in the sense that in the former, there is no place for financial intermediary and in the latter; the financial intermediary plays an important role. In direct financing, the finance can be done directly through the financial market whereas in indirect financing, the money deposited or invested by households and other economic agents is used to finance the borrowing requirements through financial intermediaries. In direct financing, often, interest rate is not paid but in indirect financing interest rate has to be paid because an intermediary is involved.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 2, Problem 1LO

To determine

The comparison between direct and indirect finance.

Concept Introduction:

Direct Finance - In this system, the borrowers borrow directly from the financial market without intermediaries.

Indirect Finance - In this system, the borrowers get the services indirectly through financial intermediaries.

Expert Solution & Answer

Explanation of Solution

Direct and indirect finances are different in the sense that in the former, there is no place for financial intermediary and in the latter; the financial intermediary plays an important role. In direct financing, the finance can be done directly through the financial market whereas in indirect financing, the money deposited or invested by households and other economic agents is used to finance the borrowing requirements through financial intermediaries. In direct financing, often, interest rate is not paid but in indirect financing interest rate has to be paid because an intermediary is involved.

Answer 6

Chapter 2, Problem 1LO

To determine

The comparison between direct and indirect finance.

Concept Introduction:

Direct Finance - In this system, the borrowers borrow directly from the financial market without intermediaries.

Indirect Finance - In this system, the borrowers get the services indirectly through financial intermediaries.

Expert Solution & Answer

Explanation of Solution

Direct and indirect finances are different in the sense that in the former, there is no place for financial intermediary and in the latter; the financial intermediary plays an important role. In direct financing, the finance can be done directly through the financial market whereas in indirect financing, the money deposited or invested by households and other economic agents is used to finance the borrowing requirements through financial intermediaries. In direct financing, often, interest rate is not paid but in indirect financing interest rate has to be paid because an intermediary is involved.

Answer 7

Chapter 2, Problem 1LO

To determine

The comparison between direct and indirect finance.

Concept Introduction:

Direct Finance - In this system, the borrowers borrow directly from the financial market without intermediaries.

Indirect Finance - In this system, the borrowers get the services indirectly through financial intermediaries.

Answer 8

Expert Solution & Answer

Explanation of Solution

Direct and indirect finances are different in the sense that in the former, there is no place for financial intermediary and in the latter; the financial intermediary plays an important role. In direct financing, the finance can be done directly through the financial market whereas in indirect financing, the money deposited or invested by households and other economic agents is used to finance the borrowing requirements through financial intermediaries. In direct financing, often, interest rate is not paid but in indirect financing interest rate has to be paid because an intermediary is involved.