Describe each of the following financial institutions: What sorts of assets does it hold? What sort...

Describe each of the following financial institutions: What sorts of assets does it hold? What sort of liabilities does it issue? What functions does it serve in the financial system?
(a) Savings and Loans

(b) Commercial Banks

(d) Property and Casualty Insurance Companies

(e) Pension Funds

Solutions

Expert Solution

lAnswer a : Saving and loan : Saving and loan are specialized bank create to promote affordable home ownership

.Assets includes Down payment, cash money and loan amount available with them. Asset includes CD, other type of asset available with them.

Liabilities includes the mortgage payment of loan, Interest paid to customer on savings

The primary function of saving and loan are financing long term residential mortgage loans. Saving and loan bank provides loan mortgage and accept deposits in saving account.

b : Commercial banks : A commercial bank is a type of bank that provides services such as accepting deposits, making business loan and offering basic investment projects etc.

Assets included are liquidity in profitability , cash in hand as well as cash holding in central banking system .

liabilities include capital and reserves, loans , deposits as well as borrowings etc.

The primary function of commercial bank are are accepting deposits and also lending funds. deposits are saving , current and time deposits included in them.

c : Money market mutual fund : It is fixed income of mutual fund that investment in securities.

Assets included are portfolio mutual fund are shares , funds etc.

liabilities included are payment of the fund in a systematic manner.

The primary function of money market mutual fund are providing moderate level of income in a systematic and logical manner.

d : property and casualty insurance companies : It is related to type of coverage and type of payment that has been made in systematic and logical manner.

Assets included are premium amount and coverage of different assets.

liabilities included paying back insurance money on time and logical.

The primary function of property and casualty insurance company are liability coverage to help and protect you as well as legally responsible.

e : pension funds : A pension fund is fund from which pension has been paid.

Assets included asset bought with contribution of the fund and the pension plan.

liabilities are total amount of money that has been paid to the retired person in a systematic manner.

the primary function is to provide fund to the person who have reached the age of retirement.

d :

Rahul Sunny answered 7 months ago

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