Define the direct finance and indirect finance in markets, Finance Basics

Define the direct finance and indirect finance in markets.

In direct finance, borrower-spenders borrow funds directly by lenders into the financial markets through selling them securities. Into indirect finance, a financial intermediary stands among the lender-savers and the borrower-spenders: the intermediary assists to transfer funds through one to the other. It suggests that financial markets and intermediaries are optional which perform more or less similar function but in diverse ways (and perhaps along with different degrees of achievement). Note, nevertheless, that the process of indirect finance, termed as financial intermediation, is the most significant way of transferring funds by lenders to borrowers. That contrasts with the attitude of the media to focus mostly on financial markets.

Posted Date: 9/3/2013 7:54:31 AM | Location : United States







Related Discussions:- Define the direct finance and indirect finance in markets, Assignment Help, Ask Question on Define the direct finance and indirect finance in markets, Get Answer, Expert's Help, Define the direct finance and indirect finance in markets Discussions

Write discussion on Define the direct finance and indirect finance in markets
Your posts are moderated
Related Questions
Homework Chapter 4 A mortgage loan in the amount of $100,000 is made at 12% interest for 20 years. Payments are to be monthly in each part of this problem. a. What will monthly

Trial and Error Method a) Select any rate of interest on random and employ it to compute NPV of cash inflows. b) If rate selected produces NPV lower than the cost, want a l

Advantages of Using Debt Finance Interest on debt is a tax permit able expense and as that it is reduced via the tax allowance. The cost of debt is fixed regardless of

At t = 0, a 3-year, 7% coupon corporate bond with face value $1,000 is trading at a credit spread of 15%. The risk free rate is constant and equal to 4% for all maturities. The rec

what are the difference between receipt and payment account and income and expenditure account ?

If the winner’s prize increases at the same rate (8.43%), what will it be in 2041?

From the following cost, production and sales data of Decors Motor Ltd., prepare comparative income statement for three years under (i) absorption costing method, and (ii) marginal

what type of assets does Intel own and the most significant asset to the company and why?


Price Earnings Ratio Price earnings (P/E) or ratio =  Market price per share (MPS)/Earnings per share                                     OR    = Market value of equity /Ea