The process by which allocation of funds is done is called ____.

financial intermediation

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financial integration

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financial disinvestment

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financial leveraging

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Solution

The correct option is A financial intermediation
The process by which allocation of funds is done is called financial intermediation. This process helps to channelize funds from the borrowers to lenders. Financial intermediation generally cause reduction in transaction cost. This process is mainly performed by the financial intermediaries, such as stockbroker, commercial bank, investment bank, etc.

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Similar questions

Financial leverage is called favourable if

Financial leverage is called favourable if

(a) Return on investment is lower than the cost of debt

(b) Rol is higher than the cost of debt

(d) If the degree of existing financial leverage is low

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