Briefly explain HOW a financial intermediary can do a better job than yourself on the following aspects: 1. providing liquidity 2. diversifying risk 3. collecting and processing information
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Briefly explain HOW a financial intermediary can do a better job than yourself on the following aspects:
1. providing liquidity
2. diversifying risk
3. collecting and processing information.
Step by step
Solved in 3 steps
- What factors influence your decision of where to put your money? a. How do you want to receive advice from the financial institution that holds your money? What advice topics would you prefer to receive in a format that lets you read/review on your own? (ex. email, newsletter, guides, etc.) What advice topics are specific to you where you'd rather interact with a real person?Identify two financial intermediaries. What are their respective functions? What are their major roles in the economy?Why is it important for people who own stocks and bonds to diversify their holdings? What type of financial institution makes diversification easier?
- Financial intermediaries a.reduce the cost of financial transactions. b.provide safety of resources only for the large borrowing customers who can afford it. c.increase the cost of financial transactions but offset these higher costs by providing safekeeping of customer funds. d.provide handling of payments but usually less efficiently than other firms.Allen would like to open a business to produce a software that he thinks would be well-received by the market. However, the investment needed to start a busi- ness is very high and Allen could barely cover it on his own. The software is very likely to be successful and generate profits, but it takes 2 years before profits are generated. Explain why the existence of a financial intermediary, like a bank, makes Allen’s investment more likely.Describe the difference between financial markets and financial intermediaries? How can your funds be used in a market versus an intermediary?
- Please discuss the following. 1. Financial markets are institutions and systems that facilitate transactions in all types of financial claims. 2. What is the importance of financial markets in a nation's economy? Discuss fully.Why is it so important to an economy to have fully developed financial markets?What caused Silicon Valley Bank to reach the national and international headlines and breaking news?
- Explain the difference between financial institutions and financial markets, please give examples.What are the most liquid assets?Which type of financial intermediary provides individual investors with professional management of their money and diversification in order to limit the risk of investing? A. mutual funds B. insurance companies C. hedge funds D. investment banks