Free CIMAPRA17-BA1-1 Exam Braindumps (page: 57)

Page 57 of 118

A business could meet a short term financial need by all of the following except one.
Which ONE is the exception?

  1. Using its cash reserves
  2. A bank overdraft
  3. Issuing shares
  4. Factoring

Answer(s): C



Financial intermediation is the process by which

  1. Net savers and net borrowers are brought together.
  2. Banks create credit on the basis of their liquid assets.
  3. The central bank acts as a link between commercial banks and the government.
  4. Banks provide commercial services for their customers.

Answer(s): A



Which of the functions of a financial intermediary is described by the following statement 'Bundles small deposits of liquidity into larger loans'?

  1. Aggregation
  2. Risk management
  3. Maturity transformation
  4. Introducing borrows and lenders

Answer(s): A



Which of the functions of a financial intermediary is described by the following statement 'Invests across a wide range of assets to reduce the loss of capital value if a particular borrower defaults'?

  1. Aggregation
  2. Risk management
  3. Maturity transformation
  4. Introducing borrows and lenders

Answer(s): B



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