Reference no: EM131379237
1- a. What is meant by maturity intermediation?
If net borrowers and net lenders have different optimal time horizons, Fls can service both sectors by matching their asset and liability maturities. That is, the Fl can offer the relatively Short-term liabilities desired by households (Say, in the the form of bank deposits) and also satisfy the demand for long term loans (say, in the form of home mortgages). By investing in a portfolio of long-and short term assets and liabilities, the Fl can both reduce risk exposure through diversification and manage risk exposure by centralizing its hedging activities.
b. What is meant by denomination intermediation?
Because they are sold in very large denominations, many assets are either out of reach of individual savers or would result in savers holding highly undiversified asset portfolios. For example, the minimum size of a negotiable CID is $100,000; commercial paper (short term corporate debt) is often sold in minimum packages of $250,000 or more. individual savers may be unable to purchase such instruments directly. However, by buying Shares in a mutual fund with other small investors, household savers overcome the constraints to buying assets imposed by large minimum denomination sizes. Such indirect access to these markets may allow small savers to generate higher returns on their portfolios as well.
2- Go to the website of the FDIC (www.fdic.gov) and find the following items for the second quarter of 2015.
a. Number of FDIC-insured commercial banks in the United States
b. Number of FDIC-insured savings institutions in the United States
c. Number agriculture banks by asset concentration.
d. Number mortgage lenders by asset concentration.
e. Number credit card lenders by asset concentration
f. Number commercial lenders by asset concentration
g. Average return on assets for all commercial banks
h. Average return on equity for all commercial banks
i. Net interest margin for all commercial banks
j. Equity multiplier all commercial banks
k. Number failures of FDIC-insured institutions between 2007-2015
l. How many of these failures occurred in Tennessee?
m. How many banks failed in the United States in 1937?
n. How many of these failures occurred in Tennessee?
o. On 6/30/2015, how many commercial banks were in the asset category more than $1 Billion
p. What percent of total commercial bank assets did this category hold?