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What can a financial institution often do for a surplus economic unit that it would have difficulty doing for itself if the surplus economic unit (SEU) were to deal directly with a deficit economic unit (DEU)?
Surplus economic units do not generally have the expertise to define if a deficit economic units can and will make good on their obligations, thus it is difficult for them to predict while a would-be deficit economic unit will be unsuccessful to pay what it owes. Such type of a failure is likely to be devastating to a surplus economic unit which has lent a proportionately large amount of money. On the contrary, a financial institution is in a better position to expect who will pay and who won't. It is also in a better position, comprising greater financial resources, to occasionally absorb a loss while someone fails to pay. (This is just one instance of the beneficial things financial institutions do for SEUs).
. Why do some organizations seem to have a new CEO every year or two, whereas others have top leaders who stay with the company for many years (e.g., John Chambers at Cisco)? What
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