A derivative B. secondary C. primary D. monetary instruments alternative mechanisms of fundraising financing A. direct, indirect

A.maximizing, minimizing, instruments, markets, institutions
B. minimizing, instruments, maximizing, institutions, markets
C. maximizing, minimizing, institutions, instruments, markets
D. minimizing, maximizing, institutions, instruments, markets
11. Financial intermediation is:
a. much more important than direct finance through stock and bond markets.
b. only a little more important than direct finance in the United States.
c. far less important than direct finance through stock and bond markets.
d. the same thing as finance through stock and bond markets
12. Financial intermediation exists, in part, because:
a. the transaction costs associated with direct finance can at times be prohibitive.
b. direct finance through stocks and bonds is the dominant form of financing.
c. transaction costs of financial intermediation is always higher than direct finance.
a. the transaction costs associated with direct finance can at times be prohibitive.
d. financial markets work so well.
13. When the amount of direct and indirect financing are summed, the result is usually:
a. greater than 100% of GDP.
b. equal to GDP.
c. less than GDP.
d. approximately 50% of GDP.

14. The reason financial intermediaries play such an important role in economies has to do with

all of the following except:
a. the composition of GDP
b. transaction costs.
c. complexity of a lot of financial transactions.
d. information costs.

10. Financial intermediaries:

a. increase the cost of financial transactions but offset these higher costs by providing
safekeeping of customer funds.
b. provide handling of payments but usually less efficiently than other firms.
c. reduce the cost of financial transactions.
d. provide safety of resources, but only for the large borrowing customers who can afford it.
10. Financial intermediaries:
a. increase the cost of financial transactions but offset these higher costs by providing
safekeeping of customer funds.
b. provide handling of payments but usually less efficiently than other firms.
c. reduce the cost of financial transactions.
d. provide safety of resources, but only for the large borrowing customers who can afford it.
15. Financial intermediaries: