Question

In the U.S. financial system, savings are transfered to investments directly and indirectly. List at least...

In the U.S. financial system, savings are transfered to investments directly and indirectly. List at least 4 examples of Non Bank financial institutions that indirectly make this transfer. Indicate who are the deficit units and who are the surplus units in each one.

Homework Answers

Answer #1

1. Mutual Funds - MFs are examples of NBFCs which transfer funds from savers to users of capital. Investors or the public is the surplus unit and the companies are the deficit units.

2. Credit Unions - members of the union are the surplus units and the companies in which the money is invested are the surplus units.

3. Hedge Funds - these are similar to the mutual funds but are for more sophisticated investors.

4. Private Equity Funds- These are the funds which invest generally in non listed companies.

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