Question

12. How do FIs alleviate the problem of liquidity and price risk faced by investors wishing to invest in securities of corpora- tions? (LG 1-6) 13. How do financial institutions help individuals diversify their portfolio risks? Which financial institution is best able to achieve this goal? (LG 1-6) What is meant by maturity intermediation? (LG 1-6) 35. What is meant by denomination intermediation? (LG 1-6) 16 What other services do Fls provide to the financial system? (LG 1-6) 17. What types of risks do FIs face? (LG 1-7) 18. Why are Fls regulated? (LG 1-8) ? . ..and in hanke? chift from the tradi.
12, 13, 17 & 18 only

Answer 1

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Note: I have answered question 12. As per HOMEWORKLIB RULES, experts are restricted to the limit of 1 question. Please ask the remaining questions in a seperate part. I will be more than happy to help!!

Answer(12):

FI implies financial institution, these FI are liable for the cash supply in the market, the cash can be supply by moving the assets starting with one spot then onto the next spot as speculators supply the cash to the organizations. The cash can be in any shape like credits, ventures and stores. The enormous budgetary organizations additionally control the cash stream in the economy.

The danger of liquidity happens when the savers don't sell their own protections on request. For example from banks the shopper can pull back their cash in the working days whenever. Henceforth, banks likewise need to pay a few credits which have a long haul period and put a few assets in the benefits which are illiquid in nature, on the grounds that the banks additionally differentiate their portfolios and screen the association's presentation that they have given the protections.