Purchase Solution

Management of Financial Institutions Questions

Not what you're looking for?

Ask Custom Question

1.Identify two financial intermediaries. What are their respective functions? What are their major roles in the economy?

2.What are the money markets and what are the capital markets? How do they differ? What are their respective activities?

3.If an asset is called a derivative, what does that mean? Explain your answer and use examples.
Cite sources please

Purchase this Solution

Solution Summary

The expert identifies two financial intermediaries. The respective functions are provided.

Solution Preview

1. Financial Intermediaries are companies that connect surplus and deficit agents. In other words, financial intermediaries are institutions that serve as channels between those who need money and those who have extra money to invest. Some common financial intermediaries are banks, credit unions, insurance companies and pension funds. Let us look at the banks and the pension funds.

Banks (example: Citibank) are financial intermediaries that receives deposits and transfer the money into lending activities, either directly by loaning (aka retail banking) or indirectly through capital markets (aka investment banking). The economy roles of banks include issuing money (e.g. bank notes and cheques), credit intermediation (i.e. act as a middle man between lenders and borrowers to facilitate the investment) and settling payments (e.g. collecting dues on behalf of lenders and paying bills on behalf of borrowers).

Pension Funds (example: Canada Pension Plan Investment Board) are any plans, ...

Purchase this Solution

Free BrainMass Quizzes
Operations Management

This quiz tests a student's knowledge about Operations Management


This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.