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?
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