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Aa Aa The capital allocation process involves the transfer of capital among different entities that indude individuals, small businesses, banks, finandial intermediaries, companies, mutual funds,

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Aa Aa The capital allocation process involves the transfer of capital among different entities that indude individuals, small businesses, banks, finandial intermediaries, companies, mutual funds, and other market participants. In a developed market economy, capital flows freely between entities that want to supply capital to those who want it. This flow of capital can be dassified in three ways. In the table below, identify the nature of capital transfer given in the scenario with its appropriate dassification: Indirect Transfers Indirect Transfers through Investment through Financial Scenario Direct Transfers Banks Intermediaries Steve's grandfather loans him $30,000 to start a small coffee shop in the East Village in Manhattan. Israel launched a 10-year global bond issue of $1.5 billion in early 2009. Leading investment banks like Citigroup, Deutsche Bank, and Goldman Sachs managed the deal. (Source: Reuters.com, Mar. 18, 2009.) A small startup firm has each of the partners contribute $50,000 in capital to help the company make payroll for the next three months. Elliot invests $25,000 by purchasing 1,000 shares of an emerging markets mutual fund. This mutual fund invests in companies in Brazil, India, and China. He bought the mutual fund from the mutual fund company

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