SSUs may prefer intermediated financing to direct financing if they are seeking liquidity and safety for their investments.

Question

Quizplus · Accepted Answer

Intermediated financing, through financial intermediaries like banks or mutual funds, often provides SSUs (Surplus Spending Units) with more liquidity and safety compared to direct financing, where they would invest directly in securities or projects. Intermediaries can offer more diversified and professionally managed investment options, reducing risk and improving liquidity.

SSUs May Prefer Intermediated Financing to Direct Financing If They