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The capital allocation process involves the transfer of capital among different entities that include individuals, small businesses, banks, financial intermediaries, companies, mutual funds, and other
The capital allocation process involves the transfer of capital among different entities that include individuals, small businesses, banks, financial 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 classified in three ways. In the table below, identify the nature of capital transfer given in the scenario with its appropriate classification Indirect Transfers through Investment Banks Indirect Transfers through Financial Intermediaries Scenario Direct Transfers Entrepreneurs often start businesses by seeking financial help from family and friends. Shylock, a moneylender in Shakespeare's play The Merchant of Venice, lends his own money to Antonio, who needs 3,000 ducats to help his friend. W2 Corp. needs capital to finance a new product line. It borrows money in the form of long-term bonds underwritten by an investment bank. Citibank issues a loan to Jennifer for the expansion of her flower delivery business
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