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    Explaining direct finance & Indirect finance

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    "If financial markets operated perfectly and without cost financial intermediaries would not exist. All finance would be direct finance." Explain what is meant by the term "direct finance" and state whether you agree or disagree with this statement. Explain why.

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    Solution Preview

    Direct finance- surplus units deal directly with deficit units (1 asset, 1 liability)
    <br>Indirect finance- FI(financial intermediaries) collects funds ...

    Solution Summary

    This solution helps explain direct and indirect finance.