Question

As a financial manager of a large firm, you plan to borrow $100 million over the next year.

i). Mention 2 most likely ways in which you can borrow $100 million?

ii). How do individuals indirectly provide the financing for your firm when they maintain deposits at depository institutions.

Answer 1

I)you can take a loan from a bank or issue bonds

ii)the private sector brings its savings to banks, these savings form deposits, which can then be issued loans to enterprises and organizations