Finance

Answer these questions

• 3 Compare and contrast direct finance and indirect finance. Which is more likely to have a larger share of the total financial market in a mature economy? In a young economy? Why?

• 5 What is the relationship between the efficiency of a financial system and the rate of economic growth?

• 7 Describe the major types of risks to financial securities, and give a specific example of each. How do investors measure risk?

• 9 What is liquidity, and why do investors care about it?