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Question3 How many of the following statements are correct in regards to intermediated financing arrangements? I. Users of funds obtain financing directly from money and capital marketsII. Financial instruments are issued directly between savers and borrowersIII. A commercial bank stands between savers and borrowers, with two separate contractual agreementsIV. Borrowers avoid the costs of intermediation and have increased flexibility in issuing securitiesV. There are higher search costs for suppliers of funds One statement is correct Four statements are correct Three statements are correct All five statements are correct Two statements are correct ResetMaximum marks: 1 Flag question undefined
Options
A.One statement is correct
B.Four statements are correct
C.Three statements are correct
D.All five statements are correct
E.Two statements are correct
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Step-by-Step Analysis
To analyze the statements about intermediated financing arrangements, I will evaluate each statement on its own:
Option I: 'Users of funds obtain financing directly from money and capital markets.' This describes direct finance, where savers and borrowers interact without a financial intermediary. In intermediated financing, a bank or another intermediary sits between them, so this statement is not accura......Login to view full explanationLog in for full answers
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Question3 How many of the following statements are correct in regards to intermediated financing arrangements? I. Users of funds obtain financing directly from money and capital marketsII. Financial instruments are issued directly between savers and borrowersIII. A commercial bank stands between savers and borrowers, with two separate contractual agreementsIV. Borrowers avoid the costs of intermediation and have increased flexibility in issuing securitiesV. There are higher search costs for suppliers of funds Two statements are correct Three statements are correct Four statements are correct All five statements are correct One statement is correct ResetMaximum marks: 1 Flag question undefined
Question3 How many of the following statements are correct in regards to intermediated financing arrangements? I. Users of funds obtain financing directly from money and capital marketsII. Financial instruments are issued directly between savers and borrowersIII. A commercial bank stands between savers and borrowers, with two separate contractual agreementsIV. Borrowers avoid the costs of intermediation and have increased flexibility in issuing securitiesV. There are higher search costs for suppliers of funds All five statements are correct One statement is correct Four statements are correct Three statements are correct Two statements are correct ResetMaximum marks: 1 Flag question undefined
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