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In: Finance

Briefly describe each of the following financial institutions: investment banks, commercial banks, financial services corporations, pension...

Briefly describe each of the following financial institutions: investment banks, commercial banks, financial
services corporations, pension funds, mutual funds, exchange traded funds, hedge funds, and private
equity companies

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Expert Solution

Investment bank refers to intermediary services provided by financial institutions to their clients. They provide a channel between the investor and corporation. Investment banks provide advisory services on various corporate issues like public offer, underwriting, merger and acquisition etc.

Commercial banks -are those financial institutions which involve in the basic banking business and allied banking services. commercial banks accepts the public deposit and sanction funds in the form of loan and provides various services like brokerage services, and allied banking services.

Financial service corporations are the financial institutions which provide financial services. Financial institutions offer various services like banking, stock brokering services, insurance services, hire purchase services, lease financing services, factoring and forfeiting services, investment services etc.

Pension funds are also known as superannuation funds which provide retirement income. pension funds generally hold funds in large chunks to invest in listed public and private companies.

Mutual funds are those institutions which collect the fund from general public and investment in a portfolio on the basis of the investment objective on behalf of investors who contributed their funds to mutual funds. Mutual funds provide specialized investment and portfolio services.

Exchange traded fund is a type of mutual fund which follows or tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange

Hedge fund refers to the investment fund which pools funds from heterogeneous group of investors and invest into a variety of assets that uses varied and complex proprietary strategies and invests or trades in complex products like listed and unlisted derivatives

Private equity companies are those companies which invest their funds into private equity of start up companies and provides back up to the existing companies through a variety of investment strategies like venture capital, leveraged buyout and growth capital

jeff jeffy answered 2 months ago
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