A financial system is a means of getting savers and borrowers together. 1. Explain the difference between
Question:
1. Explain the difference between direct finance and indirect finance.
2. List two types of asymmetric information problems.
3. Describe some benefits of living in a world with financial intermediaries.
4. State the formula for finding a bank’s capital, or its net worth.
5. Define insolvency.
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1 In direct finance borrowers and lenders come together in a market ...View the full answer
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