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Homework 2 - Yi Chen Homework#2 1 Identify the major...

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Yi Chen Homework #2 1. Identify the major financial intermediaries that have roles in directing saving to business firms. Financial intermediation is the process by which individual saving s are accumulated in depository institutions and, in turn, lent or invested. The major types of financial intermediaries grouped into four categories: depository institutions, contractual savings organizations, securities firms, and finance companies. 2. Identify what are depository institutions, and briefly describe why and when thrift institutions were founded. Depository institutions accept deposits or savings from individuals and then lend these pooled savings to businesses, governments, and individuals. Depository institutions include commercial banks, savings and loan associations(S&Ls), saving banks, and credit unions. Thrift institutions are noncommercial bank depository institutions referred to as savings and loan associations, savings banks, and credit unions, all of which accumulate individual savings and lend primarily to other individuals.
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