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The capital allocation process involves the transfer of capital among different entities that include individuals, small businesses, 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: Scenario. Steve's grandfather loans him $30,000 to start a small coffee shop in the East Village in Manhattan, 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. A small startup firm has each of the partners contribute $50,000 in capital to help the company make payroll for the next three months. Israel launched a 10-year global bond issue of $1.5 billion in early 2009. Leading investment banks such as Citigroup, Deutsche Bank, and Goldman Sachs managed the deal (So Direct Transfers O Indirect Transfers. through Investment Banks O O Indirect Transfers through Financial Intermediaries

The capital allocation process involves the transfer of capital among different entities that include individuals, small businesses, 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: Scenario. Steve's grandfather loans him $30,000 to start a small coffee shop in the East Village in Manhattan, 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. A small startup firm has each of the partners contribute $50,000 in capital to help the company make payroll for the next three months. Israel launched a 10-year global bond issue of $1.5 billion in early 2009. Leading investment banks such as Citigroup, Deutsche Bank, and Goldman Sachs managed the deal (So Direct Transfers O Indirect Transfers. through Investment Banks O O Indirect Transfers through Financial Intermediaries

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter1: An Overview Of Financial Management And The Financial Environment
Section: Chapter Questions
Problem 5Q: Describe the ways in which capital can be transferred from suppliers of capital to those who are...
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The capital allocation process involves the transfer of capital among different entities that include individuals, small businesses, 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: Scenario: Steve's grandfather loans him $30,000 to start a small coffee shop in the East Village in Manhattan. 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. A small startup firm has each of the partners contribute $50,000 in capital to help the company make payroll for the next three months. Israel launched a 10-year global bond issue of $1.5 billion in early 2009. Leading 1 investment banks such as Citigroup, Deutsche Bank, and Goldman Sachs managed the deal. (Source: Reuters.com, Mar. 18, 2009.) Direct Transfers Indirect Transfers through Investment Banks O Indirect Transfers through Financial Intermediaries O
Transcribed Image Text:The capital allocation process involves the transfer of capital among different entities that include individuals, small businesses, 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: Scenario: Steve's grandfather loans him $30,000 to start a small coffee shop in the East Village in Manhattan. 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. A small startup firm has each of the partners contribute $50,000 in capital to help the company make payroll for the next three months. Israel launched a 10-year global bond issue of $1.5 billion in early 2009. Leading 1 investment banks such as Citigroup, Deutsche Bank, and Goldman Sachs managed the deal. (Source: Reuters.com, Mar. 18, 2009.) Direct Transfers Indirect Transfers through Investment Banks O Indirect Transfers through Financial Intermediaries O
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