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.

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.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 10QFR

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What are the basic risk faced by financial intermediaries? Discuss each throughly.
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.
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.
Which of the following is NOT TRUE about Insurance companies? *a. They are non-depository institutions that does not accept deposits.b. Collects deposits like banks and reinvests them in profitable financial securities.c. Collects premiums from clients for payment of policies.d. Clients transfer risks to insurance companies in exchange for premiums paid.e. None of the choices.
Which 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
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
In how many categories, financial system is classified?
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34. Bankers have a reputation for conservatism in politics, dress, and business affairs. Is there an economic rationale for this conservatism? Explain.
The following are the common characteristics of financial intermediaries, except: *a. Providers of loans.b. Maintains stability in the capital market.c. Making the investors rich.d. Providing investment advice
write in 3 paragraphs what financial institutions are.