The flow of funds from saving to investment through direct financing involves
A) the saver holding the lender's IOU.
B) two separate contracts.
C) the lender holding the borrower's IOU.
D) several different financial institutions.

Question

Quizplus · Accepted Answer

In direct financing, the lender directly holds the borrower's IOU, indicating a direct relationship between the saver and the borrower without intermediaries.

The Flow of Funds from Saving to Investment Through Direct