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27 Jun 2019

3. What is Financial Intermediation and describe the advantages of Financial Intermediation.

4. What is Depository and Non-Depository Institutions and give four examples of each types.

5. Describe the main functions and organizational structure of the Federal Reserve System.

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Sixta Kovacek
Sixta KovacekLv2
27 Jun 2019
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Related questions

1. List two services that FI's provide to the public. Why do intermediaries provide these services? What is a contingent financial claim? give two examples.

2. How are FI's like other firms? How are FI's similar to each other? How are they different?

3. What is a depository institution? What are the main types of depository institutions? What distinguishes them from other intermediaries?

4. Why do banks hold reserve assets?

5. John, a recent College graduate, is buying his first house. From which FI's could he obtain a mortagage loan?

What are the economic functions that financial intermediaries and markets perform that benefit society? In your answer, discuss the relationships of financial intermediaries and financial markets to the savings investment process within an economy and to each other. In addition, provide in your discussion an analysis of the differences in preferences among economic agents as an explanation for the wide variety of primary and secondary securities found in financial markets and the reasons for federal and state regulation of depository institutions and other financial intermediaries. In this regard, consider what role asset-backed securities, securitization and the secondary markets for these instruments play in the efficiency of the financial intermediation process. For example, the mortgage-backed securities secondary marketsҀ™ development and the funds flows to finance home ownership. In this discussion consider the role of interest rates in determining the demand for current and future consumption and the relationship of this to individual and aggregate saving.

As a financial manager of a large firm, you plan to borrow $70 million over the next year. Several options are available to your firm, all of which must be carefully considered. In your role as the financial manager, create a short paper that lists the best alternatives for your firm to borrow the $70 million and describe the advantages and disadvantages of each option. Also, consider the following:

Assuming you decide to issue debt securities, describe the types of financial institutions that may purchase these securities.

How do individuals indirectly provide the financing for your firm when they maintain deposits at depository institutions, invest in mutual funds, purchase insurance policies, or invest in pensions?

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