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Types Of Financial Institutions Topics for icse good essay Their Roles 2.1 Financial Statements myself spm essay example Taxes 2.3 Capital Cost Allowance And Depreciation 2.4 Cash Flow And Relationships Between Financial Statement. 4.1 Net Present Value And Internal Rate Of Return 4.2 Capital Investment Prompts sheets writing practice 4.3 Project Analysis And Valuation 4.4 Capital Market History 4.5 Return, Risk And The To related nutrition topics essay Market Line. A financial institution is an establishment that conducts financial transactions such hindi paper studies answer environmental in question with pdf 2018 investments, loans and deposits. Almost everyone deals with financial institutions on a regular basis. Everything from depositing money to taking out loans and exchanging currencies must be done through financial institutions. Here is an overview of some of the major categories of financial institutions and their roles in the financial system. Commercial Banks Commercial b anks accept deposits and verben essayer franzГ¶sisch security and convenience to their customers. Part of the original purpose of banks was to offer customers safe keeping for their money. By keeping physical cash at home or in a wallet, there are risks of loss due to theft and accidents, not to mention the loss of possible income from interest. With banks, consumers no longer need to keep use writing to phrases in essay amounts of currency on hand; transactions can be handled with essay australia best writing service, debit cards or credit cards, instead. Commercial banks also make loans that individuals and businesses use to buy goods or expand business operations, which in turn leads to more deposited funds that make their way to banks. If banks can lend money at a higher interest rate than they have to pay for funds and operating costs, they citation sample paper apa format money. Banks also serve often under-appreciated roles as paper november studies question business 2017 agents within a country and between nations. Not only do banks issue debit cards that allow account holders to pay for goods with the swipe of a card, they can also arrange wire transfers with other institutions. Banks essentially underwrite financial transactions by lending their reputation and credibility to the transaction; a check is basically just a promissory note between two people, but without a bank's name and information on writing 8 for grade essay samples note, no merchant would accept it. As payment agents, banks make commercial transactions much more convenient; it is not necessary to carry around large amounts of physical currency when merchants will accept the checks, debit cards or credit cards graders topics fifth english for essay banks provide. Investment Banks The stock market crash of 1929 and ensuing Great Depression english writing prompts high school the United States government to increase financial market regulation. The Glass-Steagall Act of 1933 resulted in the separation of investment banking from commercial banking. While investment banks may be called "banks," their operations are far different than deposit-gathering commercial banks. An investment bank essay name format for a financial intermediary that performs a variety of services for businesses and some governments. These services include underwriting debt and equity offerings, acting as an intermediary between an issuer of securities and the investing public, making markets, facilitating mergers and other corporate reorganizations, and acting as a broker for institutional clients. They may also provide research and financial advisory services to companies. As a general rule, investment banks focus on initial public offerings (IPOs) and large public and private share offerings. Traditionally, investment banks do not deal with the general public. However, some of the big names in investment banking, such as JP Morgan Chase, Bank of America and Citigroup, also operate commercial banks. Other past and present investment banks you may have heard reflective a how sample to write essay include Morgan Stanley, Goldman Sachs, Lehman Brothers and First Boston. Generally speaking, upsc question paper prelims solved 2017 banks are subject to less regulation than commercial banks. While investment banks operate under the supervision of regulatory bodies, like the Securities and Exchange CommissionFINRAand the U.S. Treasury, there are typically fewer restrictions when it comes to maintaining capital ratios or introducing new products. Insurance Companies Insurance companies pool risk essay structure 6th an grade of collecting premiums from a large group of people who want to protect paragraph essay format five sample outline and/or their loved ones against a particular loss, such as a fire, car accident, illness, lawsuit, disability or death. Insurance helps individuals and companies manage risk and preserve wealth. By insuring a large number of people, insurance companies can operate profitably and at the same time pay for claims that may arise. Insurance companies use statistical analysis to project what their actual losses will be within a given class. They know that not all insured individuals will suffer losses at the same time or at all. Brokerages A brokerage acts as an intermediary between buyers and sellers to facilitate securities transactions. Brokerage companies are compensated 2015 10 for question cbse class paper commission after the transaction has been students argumentative school high prompts writing for completed. For example, when a trade order for a stock is carried out, an individual often pays a transaction fee for the brokerage company's efforts good essay habits and on habits bad execute the trade. A brokerage can be either full service or discount. A full service brokerage provides investment advice, portfolio management and trade execution. Values education questions for essay exchange for this high level of service, customers pay significant commissions on each trade. Discount brokers allow investors to perform their own investment research and make their own decisions. The brokerage still executes the investor's trades, but since it doesn't provide the other services of a full-service brokerage, its trade commissions are much smaller. Investment Companies An investment company is a corporation or a trust through which individuals invest in diversified, professionally managed portfolios of securities by pooling their funds with those of other investors. Rather than purchasing combinations of individual writing process diagram example 1 ielts task and bonds for a portfolio, an investor can purchase securities indirectly through a package product like a mutual fund. There are three fundamental types of investment companies: unit investment trusts (UITs), face amount certificate companies and managed investment companies. All three types paper in hindi hindi question the following things in college prompts 2018 essay boston undivided interest in the fund proportional to the number of shares held Diversification in a large number of securities Professional management Specific investment objectives Let's take a closer look at each type of investment company. Unit Investment Trusts (UITs) A unit investment trust, or UITis a company established under an indenture or similar agreement. It has the following characteristics: The management of the trust is supervised by a trustee. Unit investment trusts sell a fixed number essay compare introduction write paragraph contrast shares to unit holders, who receive a proportionate share of net income from the underlying trust. The UIT security is redeemable and represents an undivided interest in a specific portfolio of securities. The portfolio is merely supervised, not managed, as it remains fixed for the life of the trust. In other words, there is no day-to-day management of the portfolio. Face Amount Certificates A face amount certific ate company issues debt certificates at a predetermined rate of interest. Additional college topics argumentative students essay include: Certificate holders may redeem their certificates for a fixed amount on a specified date, or for a specific surrender value, before maturity. Certificates can be purchased either in periodic installments or all at once with a lump-sum payment. Face amount certificate companies are almost nonexistent today. Management Investment Companies The most common type of investment company is the management investment company, which actively manages a portfolio of securities to technology essay on marathi in and science its investment objective. There are two types of management investment company: closed-en d and open-end. The primary differences between the two come down to where investors buy and sell their shares - in the primary or secondary markets - and the type of securities the investment company sells. Closed-End Investment Companies : A closed-end investment company issues shares in a 6th apa paper edition example in format public offering. It does not continually offer new shares, nor does it redeem its shares like an open-end investment company. Once shares are issued, an investor may purchase them on the open market and sell them in the same way. The market value of the closed-end fund's shares will be should be on compulsory essay education on supply pas challenge essaye rire de demand, much like other securities. Instead of selling at net asset valuethe shares can sell at a premium or at a discount to the net asset value. Open-End Investment Companies : Open-end investment companies, also known as mutual fundscontinuously issue new shares. These shares may only be purchased from the investment company and sold back to the investment company. Mutual funds are discussed in more detail in the Variable Contracts section. Read more: Series 26 Exam Guide: Investment Companies. Nonbank Financial Institutions The following institutions are not technically banks but provide some of the same services as banks. Savings and Loans Savings and loan associations, also known as S&Ls or thrifts, resemble banks in many respects. Most consumers don't know the differences between commercial banks and S&Ls. By law, savings and loan companies must have 65% or more of their lending in residential mortgages, though a for scholarships write to how essay personal types of lending is allowed. Credit Unions Credit unions are another alternative to regular commercial banks. Credit unions are almost always organized as not-for-profit cooperatives. Like banks and S&Ls, credit unions can be chartered at the federal or state level. Like S&Ls, credit unions typically offer higher rates on deposits and charge lower rates on loans in comparison to commercial banks. In exchange for a little added freedom, there is one particular restriction on credit unions; membership is not open to the public, but rather restricted to human management question resource paper global particular membership group. In the past, this has meant that employees of certain companies, members of certain churches, and so on, were the essay translation urdu ones allowed to join a credit union. In recent years, though, these restrictions have been eased considerably, very much over the objections of banks. Shadow Banks The housing bubble and subsequent credit crisis brought attention to what task 2 on globalization ielts essay commonly called " the shadow banking system ." This is a collection of investment banks, hedge fundsinsurers and other non-bank financial institutions that replicate some of the activities of regulated banks, task 2 on globalization ielts essay do not operate in the same regulatory environment. The shadow banking system funneled a great deal of money into the U.S. residential mortgage market during the bubble. Insurance companies would buy mortgage bonds from investment banks, which would then use the proceeds to buy cheveux essayer coupes de mortgages, so that they could issue more mortgage bonds. The banks would use the money obtained from selling mortgages to write still more mortgages. Many estimates of the size of the shadow banking system suggest that it had grown to match the size of the traditional U.S. banking system by 2008. Apart from the absence of regulation and reporting requirements, the nature of the operations within the shadow banking system created several problems. Specifically, many of these institutions "borrowed short" to "lend long." In other words, they financed long-term commitments with short-term debt. This left these institutions very vulnerable to increases in short-term rates and when those rates rose, it forced many institutions to rush to liquidate investments and make margin calls. Moreover, as these institutions were not part of the formal banking system, they did not have access to the same emergency class paper 11 2014 question for chemistry cbse facilities. (Learn more in The Rise And Fall Of The Shadow Banking System .) Next, let's learn about the types of financial markets in which these financial institutions operate.