Homework Answers
Banks are fundamental to the economic system in many ways. For instance, banks are financial intermediaries through maturity transformation – that is, they transform short-term deposits into long-term loans – thereby making sure that credit ends up in the most productive hands.
Other functions of the bank are:
- Agency functions
- Transfer of funds
- Collection of cheques
- Portfolio management
What FUNCTIONS do Central Banks perform in a market-oriented economy? Explain why each function you have...
What FUNCTIONS do Central Banks perform in a market-oriented economy? Explain why each function you have listed is important in the functioning of a market-oriented economic system? Which of these functions is the most important? 1) a) What are the principal goals that Central Banks pursue as they work to carry out monetary policy? b) In what ways are commercial banks of special importance to the functioning of the money and capital markets and the economy? c) The name COMMERCIAL...
Q1. Explain how do Commercial banks resemble securities firms and explain the special nature for structures...
Q1. Explain how do Commercial banks resemble securities firms and explain the special nature for structures of their financial statements. Answer:
why is Canadian banks called chartered banks? a). Because they receive a chater to print money....
why is Canadian banks called chartered banks? a). Because they receive a chater to print money. B). Because they receive a chater to operate in a specific province. C). Because they are run by chartered accounts. D). Because they receive a chater under the bank act. E). Because they are protected under the charter of rights and freedoms
Why can banks with greater equity financing borrow funds cheaper than other banks? A.) Because they...
Why can banks with greater equity financing borrow funds cheaper than other banks? A.) Because they have proportionately more financial leverage and hence less risk. B.) Because a greater proportion of their assets have to be in default before they fail. C.) Because they have less credit risk. D.) Because they have lower required reserves.
5. Since finance companies seemingly operate in the same market as traditional banks, why are they...
5. Since finance companies seemingly operate in the same market as traditional banks, why are they not subject to the same regulations as banks?
Why can banks with greater equity financing borrow funds cheaper than other banks? Group of answer...
Why can banks with greater equity financing borrow funds cheaper than other banks? Group of answer choices Because they have proportionately more financial leverage and hence less risk. Because a greater proportion of their assets have to be in default before they fail. Because they have less credit risk. Because they have lower required reserves.
11) When and why do commercial banks implement “credit rationing”?
11) When and why do commercial banks implement “credit rationing”?
(a) If inflation has economic costs, why don’t central banks have a target of zero inflation?...
(a) If inflation has economic costs, why don’t central banks have a target of zero inflation? Following the GFC in 2007-08, a number of economists have called for central banks to raise their inflation targets to 4 to 5 percent as a way of reducing the risk of hitting the zero lower bound (ZLB). (b) How does a higher inflation target help to reduce the risk to a central bank of hitting the ZLB? (Hint: Use the Fisher effect.) (c)...
What companies invest could be banks, bonds stocks, etc to a portfolio and why ?
What companies invest could be banks, bonds stocks, etc to a portfolio and why ?
How is LIBOR used in banks system and which part is Libor used? Why does its...
How is LIBOR used in banks system and which part is Libor used? Why does its replacement have the biggest impact on banks? Is there some data or reference materials available?
What FUNCTIONS do Central Banks perform in a market-oriented economy? Explain why each function you have listed is important in the functioning of a market-oriented economic system? Which of these functions is the most important? 1) a) What are the principal goals that Central Banks pursue as they work to carry out monetary policy? b) In what ways are commercial banks of special importance to the functioning of the money and capital markets and the economy? c) The name COMMERCIAL...
How is LIBOR used in banks system and which part is Libor used? Why does its replacement have the biggest impact on banks? Is there some data or reference materials available?
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