compare and contrast direct finance and indirect finance

Question

Question

Answer 1

Answer #1

	Direct Finance	Indirect Finance
1	Borrows fund directly from Financial Market.	Borrows fund indirectly from Financial Market
2	No Financial intermediary involved.	Financial intermediary such as banks, investment intermediaries are involved
3	Example: Borrowing money from your friends or relatives.	Example : Borrowing money from bank. The bank lends out the depositors money at higher rate to earn profit.

Answer 2

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