QUESTION 1 Which of the following is least likely to be one of the advantages of financial intermediation? a. Financial intermediation allows the risks of a project to be spread over a large number of depositors. b. A financial intermediary aggregates the funds of many small savers to lend to large projects which would otherwise not be available to depositors. O None of the answers are correct. d. Financial intermediation enables depositors to raise capital through the primary markets. O e Depositors in financial intermediaries gain from reduced transaction costs due to economies of scale in transactions. QUESTION 2 The financial manager has three main tasks in maximizing the wealth of the stockholders. Which ONE of the following is FALSE? a. Corporate governance decision: the financial manager need to appoint a board of directors to set out the overall strategic direction while taking into account the interest of other stakeholders. O b. None of the answers are correct. O Investment decision: the financial manager must weigh the costs and benefits of each investment or project. Od. Cash management decision: the financial manager must ensure that the firm has enough cash on hand to meet its obligations at each point in time. O e Financing decision: the financial manager must decide whether to raise more money from new and existing owners by selling more shares or to borrow the money instead