If the financial intermediaries are appointed by the funds suppliers then these intermediaries are classified as ____________?
Correct answer: C. delegated monitor
- A. supplier monitor
- B. funds monitor
- C. delegated monitor
- D. allocation monitor
Explanation
A financial intermediary is a delegated monitor when funds suppliers appoint it to monitor borrowers on their behalf. This reduces the need for each individual supplier to investigate and supervise borrowers separately.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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