Which of the following is NOT a major advantage of direct finance?
A) Direct finance reduces financial institution' fees.
B) Direct finance allows borrowers to diversify sources of funds.
C) Direct finance allows greater flexibility in funding types.
D) Direct finance reduces search and transactions costs.

Question

Quizplus · Accepted Answer

Direct finance does not necessarily reduce search and transaction costs; in fact, these costs can be higher in direct finance due to the need for borrowers and lenders to find each other and negotiate terms without the intermediation of financial institutions.

Which of the Following Is NOT a Major Advantage of Direct