Financial transfers of capital generally take one of three forms. In the followi

Question

Financial transfers of capital generally take one of three forms. In the following table, correctly identify the methods of transfer being described. Wellington Industries is a startup company that is issuing new securities directly to investors (for example, family members and friends, employees, and interested outsiders). Anderson Animations, Inc. is issuing new equity securities and is using a smaller regional brokerage firm to sell the issue to investors in the region. Savers deposit funds into an institution that then lends out or reinvests the funds in other securities. Based on your evaluation of the information in the preceding table, decide if the following statement is true or false. The existence of financial middlemen and financial intermediaries decreases the efficiency of the financial markets. False True

Explanation / Answer

1)

Wellington Industries - Direct Transfer

Anderson animations - Transfers through an investment banking house

Savers - Transfer through a financial intermediary

2) False.

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