chap1_2 - Saunders & Cornett, Financial...

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Unformatted text preview: Saunders & Cornett, Financial Institut 1 It is the ability to foretell what is going to happen tomorrow, next week, next month, and next year. And to have the ability afterwards to explain why it didnt happen. Sir Winston Churchill Saunders & Cornett, Financial Institut 2 What are Financial Intermediaries (FIs)? Financial Securities: contingent claims on future cash flows debt, equity, derivatives, hybrids. All firms liabilities & net worth are predominately comprised of financial securities. But most firms hold real assets such as inventory, plant & equipment, buildings. FIs assets are predominately comprised of financial securities. Saunders & Cornett, Financial Institut 3 Transparent, Transluscent and Opaque FIs Financ ial Intermed iation: The Flow of Fund s and Prima ry Secu rities Funds Surplus Units Funds Surplus Units Funds Surplus Units Funds Surplus Units Funds Surplus Units Funds Surplus Units Insurance Comp anies Funds Deficit Units Banks Funds...
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chap1_2 - Saunders & Cornett, Financial...

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