QUESTION 3 By using practical examples what are the role & uses of financial intermediaries with...

QUESTION 3 By using practical examples what are the role & uses of financial intermediaries with emphasis on Currency Swaps (NAD/USD) with comparative advantage argument?

Solutions

Expert Solution

Ans.

A country has a comparative advantage in producing a good if its opportunity cost of producing that good is less than that of its trading partner.
Financial intermediaries who deal with Currency Swaps (NAD/USD) are called swap dealer.
Currency swap refers to the swap of one currency (NAD) to another currency (USD) in the future market at pre agreed rate in the future.
A swap dealer assumes a job like that of a remote trade or government bond dealer. The swap dealer is normally a worker of a bank, protections organization or othermonetary foundation (or an auxiliary of one of these organizations) The swap dealer is a counterparty to swap exchanges with retail clients, and assumes a delegate job between retail clients. The swap dealer additionally exchanges on an interbank premise with other swap dealers. Interbank exchanging assists with building up advertise liquidity and market costs for different classes of swaps.

Rahul Sunny answered 2 months ago

Next > < Previous

Related Solutions

by using practical examples what are the roles and uses of financial intermediaries with the emphasis...

by using practical examples what are the roles and uses of financial intermediaries with the emphasis on currency swaps (NAD/USD) with comparative advantage argument?

What crucial role do financial intermediaries perform in an economy?

what are the four elements of financial intermediaries . the definition of each and provide examples...

what are the four elements of financial intermediaries . the definition of each and provide examples of each

A bank is an example of a financial intermediary. Explain the role of financial intermediaries and...

A bank is an example of a financial intermediary. Explain the role of financial intermediaries and their usefulness to the private investor ( At least 500 words)

3. Distinguish using practical examples, the differences between concoctions and decoctions. What are the relative dangers...

3. Distinguish using practical examples, the differences between concoctions and decoctions. What are the relative dangers of wrong and unapproved mixtures and combinations of alcoholic substances and how can these dangers be averted?

Describe the role that financial intermediaries play in the financial markets and explain why there are...

Describe the role that financial intermediaries play in the financial markets and explain why there are so many different types of intermediaries.

Discuss the major macro benefits of financial intermediaries. What role does the government have in the...

Discuss the major macro benefits of financial intermediaries. What role does the government have in the credit allocation process?

The following are examples of financial intermediaries,EXCEPT:Question 1 options:Commercial Banks.Insurance CompaniesFederal...

The following are examples of financial intermediaries,EXCEPT:Commercial Banks.Insurance CompaniesFederal Reserve BanksPension FundsThe following are considered part of the benefits generated by the existence of financial intermediaries in financial markets,EXCEPT:Facilitates the transfer of funds from savers to borrowers.Reduces Adverse Selection on lending operations.Improves efficiency in the allocation of resources.Eliminates all type of risk for investors.

What are financial intermediaries? What do they play in the economy?

what are practical uses of colligative properties?

Subjects