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QUESTION 3 Which of the following is NOT a financial intermediary? Investment bank Savings bank Commercial bank Investment co
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3.

Answer: 5th option

A technology firm is not a financial intermediary. It engages in manufacturing technological products or servicing technology to other firms.

All the others options indicate financial intermediary, since they are the connective link between savers and borrowers.

4.

Answer: 1st option

This is the policy of capital structure, which focuses on the amount of borrowing and the amount of equity. It depends on the situation – if the firm requires finance without having the burden of periodic interest payments, then it can go by equity; if the firm requires finance without offering ownership, then it can go by debt borrowing.

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