Scenario Direct Transfers Indirect Transfers Indirect Transfers through Investment through Financial
Banks Intermediaries
Entrepreneurs often start businesses by seeking
financial help from family and friends.
Shylock, a moneylender in Shakespeare's play
The Merchant of Venice, lends his own money to
Antonio, who needs 3,000 ducats to help his friend.
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.
xEdu is an early-stage start-up company that plans to
issue its first public common stock—called an initial public
offering (IPO)—in six months. It hires an investment bank
to underwrite the issue.