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Which of the following statements is not true? A. Based on the definition, all financial institutions are required to perform two major functions: brokerage and
Which of the following statements is not true? A. Based on the definition, all financial institutions are required to perform two major functions: brokerage and asset transformation. B. One of the basic functions of financial institutions is to expedite fund flows between investors and industrial firms. C. Because of moral hazard issues, companies could elect to invest in riskier projects after they receive funds from investors. O D. Investors need to incur costs before they invest in a company to avoid the adverse selection problem. Which of the following statements regarding finance companies is not true? A. The finance company industry has become more concentrated over time. O B. In contrast to depository institutions that rely mostly on deposits as source of funds, finance companies rely on both long-term debt such as government bonds and short-term debt such as commercial papers. C. Like depository institutions, finance companies also make real estate loans. D. In contrast to depository institutions, finance companies specialize in consumer loans but not business loans.
Which of the following statements is not true? A. Based on the definition, all financial institutions are required to perform two major functions: brokerage and asset transformation. B. One of the basic functions of financial institutions is to expedite fund flows between investors and industrial firms. C. Because of moral hazard issues, companies could elect to invest in riskier projects after they receive funds from investors. O D. Investors need to incur costs before they invest in a company to avoid the adverse selection problem.
Which of the following statements regarding finance companies is not true?
A. The finance company industry has become more concentrated over time.
O B.
In contrast to depository institutions that rely mostly on deposits as source of funds, finance companies rely on both long-term debt such as government bonds and short-term debt such as commercial papers.
C. Like depository institutions, finance companies also make real estate loans.
D. In contrast to depository institutions, finance companies specialize in consumer loans but not business loans.
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