Question

Explain the rolls of financial institutions

Explain the rolls of financial institutions

Homework Answers

Answer #1

Financial institutions play a vital role in economic development of any country. Banks and capital markets help in raising capital to finance infrastructure projects to build roads, ports, airports, power plants and dam. Investment management firms like mutual funds help individuals with portfolio management services to create wealth. Stock exchanges help in efficient exchange of securities between two parties and in price discovery for a security as well. Mortgage financing companies like Fannie Mae provides mortgage financing for individuals. The US Federal Reserve is mandated to find the right balance between inflation and growth.

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