Financial Services and Asset Management Quiz

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What is the financial intermediation process known as when funds are channeled through financial institutions?

Market-based finance

Capital investment

Direct finance

Indirect finance (correct)

Which of the following statements is true about indirect finance?

It involves direct lending between two parties.

It involves a financial intermediation process through institutions. (correct)

It bypasses financial institutions.

It promotes economic growth but does not involve financial intermediaries.

How does the financial system benefit the side with a surplus of funds?

By providing investment opportunities (correct)

By generating profits through investments

By reducing savings interest rates

By promoting economic growth

What is the primary benefit of new investments according to the text?

Increasing the level of total output (GDP) Signup and view all the answers

In the circular flow of expenditures and income, what does GDP stand for?

Gross Domestic Product Signup and view all the answers

Which route involves a direct connection between savers and borrowers without any intermediary?

Direct finance Signup and view all the answers

What role do financial intermediaries play in indirect finance?

They facilitate the financial intermediation process. Signup and view all the answers

How do market-based finance systems differ from indirect finance systems?

Market-based systems involve more financial intermediaries. Signup and view all the answers

What effect do new investments have on the economy according to the text?

They increase the level of total output (GDP). Signup and view all the answers

What is the primary function of financial institutions in the economy?

To channel funds and provide investment opportunities. Signup and view all the answers

Financial Services and Asset Management Quiz

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Questions and Answers

What is the financial intermediation process known as when funds are channeled through financial institutions?

Which of the following statements is true about indirect finance?

How does the financial system benefit the side with a surplus of funds?

What is the primary benefit of new investments according to the text?

In the circular flow of expenditures and income, what does GDP stand for?

Which route involves a direct connection between savers and borrowers without any intermediary?

What role do financial intermediaries play in indirect finance?

How do market-based finance systems differ from indirect finance systems?

What effect do new investments have on the economy according to the text?

What is the primary function of financial institutions in the economy?

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