2. If the value of the financial sector is in terms of reducing the individualrisk in the economy, how could you measure the value of the financialsector without using information on loan payments (broadly construedto include any interest payment necessary to measure an interest rateor any payment that looks like a return on an investmemt)? If wethink of the amount of individual risk remaining after individuals buyportfolios is a measure of the ineffectiveness of the financial sector [orits imperfections], what do you think accounts for these imperfections?

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Asked Nov 20, 2019
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2. If the value of the financial sector is in terms of reducing the individual
risk in the economy, how could you measure the value of the financial
sector without using information on loan payments (broadly construed
to include any interest payment necessary to measure an interest rate
or any payment that looks like a return on an investmemt)? If we
think of the amount of individual risk remaining after individuals buy
portfolios is a measure of the ineffectiveness of the financial sector [or
its imperfections], what do you think accounts for these imperfections?
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2. If the value of the financial sector is in terms of reducing the individual risk in the economy, how could you measure the value of the financial sector without using information on loan payments (broadly construed to include any interest payment necessary to measure an interest rate or any payment that looks like a return on an investmemt)? If we think of the amount of individual risk remaining after individuals buy portfolios is a measure of the ineffectiveness of the financial sector [or its imperfections], what do you think accounts for these imperfections?

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Financial Sector of an economy is the combination of firms and institutions that provide financial services. It includes banks, insurance companies, real estate firms and investment companies. This sector majorly earns revenues from mo...

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