financial intermediaries (institutions)? *

Q: 27.Which of the following statements are true? Statement I. Money markets are used to facilitate…

A: Security market is defined as the market, where the securities are purchased as well as sold that…

Q: PLEASE ANSWER ASAP   The board of a major bank is discussing their investment appraisal…

A: The capital asset pricing model (CAPM) refers to the model which tells us how the financial markets…

Q: Which of the following statements is false? The cost of debt securities is highest due to their…

A: Part (a) Answer: The correct option is (4) None of the above. Because, cost of debt securities are…

Q: The board of a major bank is discussing their investment appraisal methodology as they have a new…

A: The Capital Asset Pricing Model or CAPM model is designed to understand the relationship between the…

Q: A common problem facing any business entity is the debt versus equity decision. When funds are…

A: 1.

Q: Financial engineering has been disparaged as nothing more than paper shuffling. Critics argue that…

A: Through time, traditional financial assets such as shares, bonds, and contracts have generated…

Q: Why is it important for an investor to create a well-diversified investment portfolio? How should an…

A: Diversification is a methodology in which risk of the portfolio is reduced by distributing…

Q: Which of the following statements about diversification is INCORRECT? A) Diversification is…

A: Diversification is used as a strategy to manage risks.

Q: What are the risks and rewards of investing in the stock market as compared to the bond market? b.…

A: Because you have posted multiple questions, we will answer only the first question and for the…

Q: Which of the following statements is false?   A.   Funding risk is the risk that a firm will not…

A: The concept of risk is linked to the uncertainty of future occurrences that may or may not occur.…

Q: Regulatory reviews include an assessment of capital, asset, quality, management, earnings,…

A: Your answer:   According to the regulatory evaluation criteria of capital, capital adequacy,…

Q: Bank-based systems of financing non-financial companies are more effective than capital market-based…

A: Financial systems can help to keep domestic savings at home if they are well-governed. Financial…

Q: hich of the following is correct?   Transactions within the spot market can be used to mitigate and…

A: Hedging can be done by using forward and future and option market and can be used to mitigate spot…

Q: Financial theory (and the narrative in the textbook) indicates that NPV is the theoretically correct…

A: Introduction: This question is related to concept of Net present value (NPV) in Capital budgeting.…

Q: Which statement is not correct?      A. The main objective (role) of financial intermediaries is to…

A: Answer: Option C is the correct answer. Because "Financial intermediaries did not absorb the risks".

Q: Which of the following is true ? Select one : a . Investment bankers earn a spread based on the…

A: Investment bankers (IB) are the financial organisations which provide advice for the securities to…

Q: a. "Financial intermediaries play a crucial role in an economic crisis-they are responsible for both…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Q1: Define and differentiate between: a) Organized exchanges and Over the counter markets b) Open…

A: “Since you have asked multiple question, we will solve the first question for you. If you  want any…

Q: a. Is the investment vehicle a business? Justify your answer in no more than five (5) sentences. b.…

A: An investment vehicle is the created and financed with a debt instrument that are held by an…

Q: Which of the following statements is​ FALSE? A. Equity cost of capital is normally higher then…

A: The Modigliani Miller propositions: In their paper on Capital Structure, Modigliani and Miller (MM)…

Q: One drawback of ETFs is that investors: a) are forced to pay higher cost and fee as compared to…

A: ETF(Exchange Traded Funds) is an investment fund which includes stocks, bonds etc. They are traded…

Q: Which of the following can be considered as financial institutions in a good financial system? a.…

A: Organisation which provide any type of financial services is considered as financial institutions.

Q: Having researched derivatives for investment portfolios, is there a need for them as hedging…

A: Derivatives as hedging vehicles: Derivatives are nothing but the financial instruments in which two…

Q: Most nonfinancial firms would never hold as much of their assets in safe liquid securities as banks…

A: Banks helps the investor's by borrowing money from them and giving them periodic interest and  helps…

Q: The board of a major bank is discussing their investment appraisal methodology as they have a new…

A: Here, Required return on existing debt, 6.0% Cost of existing debt to the bank, 4.8% Return on…

Q: Moral hazard is a barrier to financing global growth because: OPTIONS: if investors have trouble…

A: Moral hazard is a situation which occurs as a result of the lack of accurate information or…

Q: Explain commercial banks’ brokerage and intermediation functions. Clearly detail how these functions…

A: Commercial bank is defined as the place, where the individuals used to do banking. It makes the…

Q: Banks still make more money on investments than fees for customer-related non-credit-related fees.…

A: Investment banking:  Investment banks will also help with reorganizations, mergers, and trades for…

Q: Which of the following is the correct definition of investment as per Graham? An investment…

A: As posted multiple independent questions we are answering only first question kindly repost the…

Q: Which one of the following is NOT an implication of market efficiency for corporate finance?

A: Since you have posted multiple independent questions in the same request, we will solve the first…

Q: Think from the borrower (management) and NOT lender (investor) points of view. Which is the less…

A: Analysis of the given options from the borrower points of view:   a) Bond financing- Bond financing…

Q: Which is correct about financial securities? a. Financial securities guarantees return to investors.…

A: "Hi, Thanks for the Question. since you asked multiple question, we will answer the first question…

Q: Since risks, such as credit, liquidity, default, technological, and legal risks, among others, may…

A: 'Financial market stability' refers to a state in which market transactions are not disrupted…

Q: The board of a major bank is discussing their investment appraisal methodology as they have a new…

A: The Capital Asset Pricing Model (CAPM) is a method that determines the relationship between…

Q: The board of a major bank is discussing their investment appraisal methodology as they have a new…

A: Beta of the project = 1.52 Risk free rate (Rf) = Return on short term government securities = 5.2%…

Q: (1) What factors might lead a company to gainadditional funds through debt financing rather…

A: Financial Activities: Financial exercises are exercises that organizations embrace to assist with…

Q: Why would an investor want to have some sort of credit enhancement included in a securitization? a.…

A: In finance, securitization is the process of conversion of an asset, most commonly the conversion of…

Q: The financial markets play an important role in channeling funds from savers to borrowers. Which of…

A: Ans.(Option C) Investors deposit funds into interest-bearing accounts which are then loaned to…

Q: Which of the following is not an example of a mitigating factor that reduces the risk that the going…

A: As per AS 2415: Consideration of an entity's ability to continue as a going concern, if auditor find…

Q: An investment vehicle, the investee, is created and financed with a debt instrument held by a debt…

A: a) An investment vehicle is an item used only to generate positive yields by investors. Reduced…

Q: Which of the following is true of the current state of financial regulation for financial…

A: Statement 1 is not correct because risk functions in bank will be fundamentally different from the…

Q: What are the risk implications/shortcomings of financial institutions in increasing their financial…

A: Financial leverage is defined as the use of the debt for acquiring an additional assets. Usage of…

Q: Secondary Intermediaries are called as such because they depend heavily on other financial…

A: Answer: TRue

Q: Which of the following statements about transaction costs and financial intermediation is not true?…

A: Transaction costs are costs caused when the products or services are bought or sold. It reflects the…

Q: The board of a major bank is discussing their investment appraisal methodology as they have a new…

A: Given: Beta of the new project, 1.52 Return in the stock market (index), 12.8% Return on short-dated…

Q: Which of the following statements is true? Group of answer choices The Principle of Diversification…

A: Diversification is investing our money in different asset classes so that we can minimize risk

Functions of Financial Institutions

Financial institutions are businesses that are formed to deal with financial and monetary transactions. These organizations primarily accept deposits, advance loans, make investments, and provide foreign exchange services. Financial institutions include, but are not limited to, banks, insurance companies, trust companies, brokerage firms, and investment bankers. Because financial institutions play such an important role in the economy in terms of monetary transactions, regulating their activities has become a requirement for governmental authorities. As a result, the government creates a multitude of laws and regulations to oversee the activities of financial institutions.