What can financial institution do for deficit economic unit, Financial Management

Assignment Help:

What can a financial institution Frequently do for a deficit economic unit (DEU) that it would have difficulty doing for itself if the DEU were to deal directly along with an SEU?

SEUs usually want to supply a small amount of funds, whereas DEUs typically wants to acquire a large amount of funds.  Thus it is frequently difficult for surplus and deficit economic units to come together on their own to arrange a mutually helpful exchange of funds for securities.  A financial institution may step in and save the day.  A bank, loan and savings, or insurance company can take in small amounts of funds from several individuals, form a large pool of funds, and after that use that large pool to purchase securities from individual businesses and governments.  (This is just only one instance of the beneficial things financial institutions do for DEUs).


Related Discussions:- What can financial institution do for deficit economic unit

Fraud and society and analytical techniques, Fraud and Society and Analytic...

Fraud and Society and Analytical Techniques: Fraud and Society - The effects and financial consequences of fraud in society including the individual, older people, financial

Explain how the special drawing rights (sdr) is constructed, Explain how th...

Explain how the special drawing rights (SDR) is constructed. Also, discuss the circumstances under which the SDR was created. Answer:   SDR was made by the IMF in 1970 as a new r

What are financial markets? why do they exist?, What are financial markets?...

What are financial markets? Why do they exist? Monetary markets are where financial securities are sold and bought.  They exist mainly to bring surplus economic units (those ha

What does high inflation have on the value of a business, What impact does ...

What impact does high inflation have on the value of a business? Besides causing distortion (as it unequally affects all goods and services), inflation enhances the uncertainty

Defien the term ension funds, Pension funds Pension funds offers retire...

Pension funds Pension funds offers retirement income in the form of annuities to employees covered by a pension plan. They obtain contributions from employers or employees and

MONEY DEMAND, #question.After read all the available information carefully,...

#question.After read all the available information carefully, prepare a two page (double-spaced) essay and answer the following questions: Assume that we have the following data: C

Explain the significance of the term additional funds needed, Explain the s...

Explain the significance of the term additional funds needed . When the pro forma balance sheet is finished, total liabilities and total assets and equity will rarely match.

Cost sheet, A proforma cost sheet of a company provides the following data:...

A proforma cost sheet of a company provides the following data:   RO Cost (per unit)      Raw materials 52

Explain hedging transaction exposure, Discuss and compare hedging transacti...

Discuss and compare hedging transaction exposure by using the forward contract vs. money market instruments. While do the alternative hedging approaches generate similar result?

The safety margin, Norfolk Ltd is specialized in producing & selling air co...

Norfolk Ltd is specialized in producing & selling air conditions.  In 2010, the manufacturing cost per unit included:

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd