Finance 11-2 - Financial Markets and Institutions Professor...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Financial Markets and Institutions Professor Doug Smith Thrifts and Consumer Finance Operations Concept Questions Assignment 11-2 Jamie Hinson December 3, 2007
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Question number one on page 640 from the Questions and Applications section is: Explain in general terms how savings institutions differ from commercial banks with respect to their sources of funds and uses of funds. Discuss each source of funds for savings institutions. Identify and discuss the main uses of funds for savings institutions, asked by Jeff Madura, author of Financial Markets and Institutions . Savings institutions rely on most of their funds generating from savings such as passbook savings and certificate deposits and money market deposit accounts. Commercial banks focus on business and residential commercial loans. There are three main sources of funds that savings institutions use when needed. “First, they can borrow from other depository institutions that have access funds in the federal fund market. The interest rate on funds borrowed in this market is referred to as the federal funds rate. Second, they can borrow at the Federal Reserve’s discount window. The interest rate on funds borrowed from the Fed is referred to as the discount rate. Third, they can borrow through a repurchase agreement (repo).
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern