FIN 3303 Chapter 16 Foreign Exchange Markets What is the foreign exchange market and who are the major participants? It is the market where currencies are traded. The major participants are governments, who through central banks, buy and sell currencies.
FIN 3303 Chapter 17 Bank Sources and Uses of Funds Main assets, liabilities, and equity accounts. Liabilities: deposits (demand deposit accounts, savings accounts, time deposits, money market accounts), borrowed funds (fed funds purchased, federal reserve
FIN 3303 Chapter 19 Bank Management The trade-off between safety and profitability As risk increases, expected profitability increases. As risk decreases, expected profitability decreases. How to calculate the capital-to-asset ratio Total capital/total as
FIN 3303 Chapter 21 Credit Unions Unique characteristics of credit unions Nonprofit Mutual form of ownership Common bond of members Federal and state charters Limited diversification Relatively small Advantages Pay no federal income taxes Able to offer at
FIN 3303 Chapter 23 Mutual Funds What is a mutual fund? Pools the funds of investors to invest on their behalf. Major advantage of a mutual fund? Diversification Distinguish between closed-end and open-end mutual funds Open-end: -Open to investment at any
FIN 3303 Chapter 26 Insurance Companies Life versus P&C companies-how are they different? P&C: -shorter contracts -more varied risk areas -wider distribution of outcomes -need liquid, marketable assets -earnings are more volatile Life & Health: -generally