The text describes 3 ways that capital can be transferred. (Capital is a term that can have a number of meanings in finance. Here it simply means funds.) Suppose a student needed funds to pay tuition and wanted to obtain a loan for that purpose.

a. Describe the process by which the financial markets would operate to transfer the funds from savers to the borrower (the student).

b. What is meant by a financial intermediary? Is there a financial intermediary in this case? If so, who/what is the intermediary?