An example of direct finance would be
A)your professors deposits his or her salary in a checking account.
B)you purchase stock in IBM from a stock broker.
C)you use your ATM card to get cash on the weekend.
D)your employer makes a contribution to your pension fund.

Question

Quizplus · Accepted Answer

Direct finance involves the transfer of funds from savers to borrowers without the intermediary of a financial institution. Purchasing stock from a stock broker fits this definition as you are directly giving your money to IBM in exchange for ownership in the company. Options A, C, and D all involve financial intermediaries (a bank, ATM machine, and pension fund, respectively) and therefore are not examples of direct finance.

An Example of Direct Finance Would Be