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)
Financial intermediaries affect the availability of credit
through all EXCEPT which of the following?
A) risk sharing among savers.
B) reducing transactions costs.
C) collecting information to mitigate asymmetric information
problems D) allowing savers to conduct direct finance
transactions.
How can we explain about the following financial instruments or
financial intermediaries?
Repurchase agreements;
Euro bonds;
Junk bonds;
Venture capital fund
Collateralized debt obligations.
In the absence of information and transactions costs, financial
intermediaries would not exist. Is this statement true, false or
uncertain? Explain your choice with a suitable analytical
framework. Can you think of two or three concepts that can help
explain this further?
The financial sector is heavily regulated. Explain how
government regulations help to solve information problems,
increasing the effectiveness of financial markets and
institutions.
Please define how these problems affect prices
1. Imperfect Information
2. Coordination Problems
3. Efficiency Wages
4. Contracts and Long Term relationships
5. Insider-outsider models