C1 - Critical thinking and critical writing

For each of the statement below, assess whether the statement is TRUE, FALSE or UNCLEAR. Provide an explanation /illustration of why this is the case. Without an explanation or with an explanation that is off topic, you will receive 0 mark.

(a) The sale of a financial asset affects the investor's equity .

(3 marks)

(b) The central bank is the bank of commercial banks.

(3 marks)

(c) In indirect finance in a traditional financial system , a household can only be a DSU.

(3 marks)

(d) The conditions to be met for the conversion of a capital note into shares to happen are there to avoid excessive dilution for existing shareholders.

(3 marks)

Answer in the box below. The expected length for each answer is approximately 3 or 4 sentences.