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- The following are the advantages of financial intermediaries, except: A. Provide guaranteed returns for investor to maximize their wealth.B. Economies of scale which reduces the costs of lending and borrowing.C. None of the choices.D. Provides convenience to the borrowers of funds.List and describe key functions performed by Treasurers of Financial institutions in primary markets when they participate in a public issue. Explain how treasurers manage the risk of information asymmetry within their respective financial institutions. 3. Outline the main risks Treasurers and Fund Managers deal with in managing their short- and long-term financial obligations.Which is NOT a common characteristic of financial intermediaries? *A. None of the choices.B. Offers secure storage for their clients' assets.C. Having a diversified portfolio of investments.D. Clients are given investment advice as to which investments are profitable.E. The risks posed by various financial intermediaries are the same.
- Write in details with citation and reference the sub topic of ''security market equilibrium and dynamic completeness'' in the Topic of Multi period security MarketsWhat are the transaction costs problems facing financialorganizations? Explain how financial intermediaries canhelp reduce these problems.What do the authors mean when they state that financial intermediaries can achieve economies of scale with respect to transaction costs? A. Intermediaries can spread transaction costs across larger transaction volumes, so the cost per unit is lower. B. Intermediaries tend to specialize in certain types of transactions, so their costs are lower because they operate at lower volume than other types of financial firms.
- The following is the balance sheet numbers reported by Bay Bank for 2020. Based on Basel 1 standards, are the banks adequately capitalized? (in millions) US Treasury Bonds $25 Deposits $297.00 Municipal Bonds $15 Mortgages $75 Bonds (Tier 2 Capital) $8.00 Loans $200 Equity (Tier 1 Capital) $10.00 Total $315 $315.00 A Yes, they have sufficient Tier 1 and Tier 1+2 capital b No, they do not have sufficient Tier 1 or Tier 1+2 capital c No, they have sufficient Tier 1 but insufficient Tier 1+2 capital d No, they do have…The following is the balance sheet numbers reported by Bay Bank for 2020. Based on Basel 1 standards, are the banks adequately capitalized? (in millions) US Treasury Bonds $25 Deposits $297.00 Municipal Bonds $15 Mortgages $75 Bonds (Tier 2 Capital) $8.00 Loans $200 Equity (Tier 1 Capital) $10.00 Total $315 $315.00 Yes, they have sufficient Tier 1 and Tier 1+2 capital No, they do not have sufficient Tier 1 or Tier 1+2 capital No, they have sufficient Tier 1 but insufficient Tier 1+2 capital No, they do have…Discuss how the concepts of pure security,short selling and no arbitrage profit help establish and understand the equilibrium in capital market. Discuss different economic determinants security prices.
- A financial intermediary (FI) has been borrowing overnight, from just two lenders, to fund purchases of relatively illiquid bonds. Each lender has been lending $D to the FI. Every morning, each lender has to decide whether to roll over his loan to the FI, or to withdraw his loan. Suppose that, if both lenders to the FI choose to roll over, the FI remains in business and will repay both lenders with interest: each lender will receive (1 ) + i D . If either or both of the lenders withdraws, the FI must immediately sell its bonds at low prices. In that case, each lender receives a fraction z of the money that is owed him, where z is less than one. That is to say, if one withdraws and the other doesn't, the lender who withdraws gets zD; the lender who rolls over gets z i D (1 ) + . If both withdraw, each gets zD. Make a "box" to describe this situation. In each of the four segments of the box, list what is received by "lender A" and "lender B." Circle the segment(s) of the box that is…Recognize thehistorical context ofthe development ofthe central bankingsystemWhich statement is incorrect related to financial intermediaries (institutions)? a. They are firms that specialize in financial intermediation - a process of borrowing funds from SSUs and lending such funds to the DSUs. b. The main objective of financial intermediaries is to convert savings from SSUs into investments. c. They are the biggest investors in equity securities in the PSE d. They offer the highest returns and lowest risks when compared to alternative investments available to SSUs. e. none of the above