With fi nancial intermediation, net lenders can earn a higher return on their surplus funds, and net

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“With fi nancial intermediation, net lenders can earn a higher return on their surplus funds, and net borrowers can acquire funds at a lower cost.” Explain how this seemingly contradictory statement can be true. (Hint: Consider a risk- free return.)

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An Introduction To Financial Markets And Institutions

ISBN: 978-0765622761

2nd Edition

Authors: Maureen Burton ,Reynold F. Nesiba ,Bruce Brown

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