Explain what is meant by direct finance

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Explain what is meant by “Direct Finance” and what types of firms engage in this, give 2 examples.

Explain what is meant by “Indirect Finance” and what types of firms engage in this, give 2 examples.

Explain how the following things encourage the functioning of financial intermediaries:

Transaction Costs

Risk Sharing

Information Costs – be specific and include explicitly either moral hazard or adverse selection.

Reference no: EM131424654

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