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Leto [7]
3 years ago
9

The capital allocation process involves the transfer of capital among different entities that include individuals, small busines

ses, banks, financial intermediaries, companies, mutual funds, and other market participants. In a developed market economy, capital flows freely between entities that want to supply capital to those who want it. This flow of capital can be classified in three ways. In the table below, identify the nature of capital transfer given in the scenario with its appropriate classification:(a) Elliot invests $25,000 by purchasing 1,000 shares of an emerging markets mutual fund. This mutual fund invests in companies in Brazil, India, and China. He bought the mutual fund from the mutual fund company.(b) Based in Grass Valley, California, L & M Seeds Co. is a small company that manufactures organic seeds. To raise capital, the company sells stocks directly to savers in Grass Valley without involving any bank or financial intermediary.(c) xEdu.com is an early-stage start-up company that plans to issue its first public common stock—called an initial public offering (IPO)—in six months. It hires an investment bank to underwrite the issue.(d) Erin borrows money from her uncle to buy a new laptop.
Business
1 answer:
Zolol [24]3 years ago
8 0

Answer:

We have to classify the transfers as Direct Transfer, Indirect Transfer Through Investment Banks, and Indirect Transfer Through Financial Intermediaries.

(a) - Indirect Transfer Through Financial Intermediaries.

A market mutual fund is a financial intermediary, and it is the option that Elliot has chosen to transfer capital.

(b) - Direct Transfer

As the statement explains, the company has not gone through any financial intermediation to raise capital. It has directly done so.

(c) - Indirect Transfer Through Investment Banks

xEdu.com hired an an investment banking to issue its initial public offering

(d) - Direct Transfer

Erin borrowed the money from his uncle without any financial intermediation.

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7 0
3 years ago
Someone who is risk averse has a general dislike for risk and a preference for certainty. If risk aversion eists in the market,
jasenka [17]

Answer:

False

Explanation:

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So, a person who is risk averse is likely to attract towards capital than preference over higher return.

6 0
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Taya2010 [7]

The control systems used in international firms are;

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  • bureaucratic
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  • Scientific

<h3>What is the control system?</h3>

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In international firms this control system helps to monitor the ethics, standards that are required by the international firm in relation with other firms across the globe.

Learn more about control system at;

brainly.com/question/14364696

6 0
2 years ago
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inna [77]

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Safety risk assessment and mitigation of safety risk.

Public relation communication that are strategic that builds mutually beneficial relationships.

3 0
3 years ago
Which is not one of the five basic elements of aâ paragraph?
Oduvanchick [21]
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Answer: A. Spelling

hope this helps!

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3 years ago
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