--%>
Assignment Help - homework help

What can a financial institution do for a surplus

What can a financial institution frequently do for a surplus economic unit which it would have complexity doing for itself if the surplus economic unit (SEU) were to deal directly along with a deficit economic unit (DEU)?
Usually, Surplus economic units do not contain the expertise to find out whether deficit economic units can and will make good on their obligations, so it is hard for them to predict while a would-be deficit economic unit will not pass to pay what it owes. Such type of failure is likely to be devastating to a surplus economic unit which has lent a proportionately large amount of money.  on the contrary, a financial institution is in a better situation to predict who will pay and who won't. It is also at a better position, having greater financial resources, to sporadically absorb a loss while someone fails to pay. (It is just one example of the beneficial things financial institutions do for SEUs)

   Related Questions in Finance Basics

  • Q : Selection of board of directors of

    How are the members of the board of directors of corporation selected and to whom do these board members owe their prime allegiance? Members of corporation's board of directors are chosen by the common stockholders and owe their allegiance to th

    		•
  • Q : Which ratios would banker is most

    Which ratios would banker is most interested while considering whether to approve an application for short-term business loan? Describe.Bankers and other lenders employ liquidity ratios to distinguish whether to extend short-term credit to a fir

    		•
  • Q : Describe primary reasons that companies

    Describe primary reasons that companies hold cash? Companies hold cash to make essential payments, to take benefit of opportunities as they arise, and to cover unforeseen emergencies.

    		•
  • Q : What is Policy Adjustments Policy

    Policy Adjustments: The changes to existing law or Administration policies. Such adjustments need action by the Governor and/or Legislature and change the workload budget.

    		•
  • Q : Define One-Time Cost One-Time Cost : A

    One-Time Cost: A proposed or real expenditure that is non-recurring (generally only in one annual budget) and not permanently comprised in baseline expenditures. The departments make baseline adjustments to eradicate prior year one-time costs and suit

    		•
  • Q : Define General Fund General Fund (GF):

    General Fund (GF): For lawful basis accounting and budgeting aims, the predominant fund for the financing state government programs, employed to account for revenues that are not particularly designated to be accounted for by another fund. The main so

    		•
  • Q : Describe formula to figure out

    Normal 0 false false

    		•
  • Q : Explain Category Transfer Category

    Category Transfer: It is a permitted transfer between categories or functions within the similar schedule of an appropriation. These transfers are currently authorized by Control Section 26.00 of the Budget Act (and proceeding to 1996-97, by Section 6

    		•
  • Q : Describe the Hirfindahl-Hirschman Index

    Describe the Hirfindahl-Hirschman Index?The Hirfindahl-Hirschman Index, or HHI, is the standard measure employed by economists to evaluate market concentration. The greater the level of concentration amongst competitors, the higher the HHI. The

    		•
  • Q : What can a financial institution do for

    What can a financial institution frequently do for a surplus economic unit which it would have complexity doing for itself if the surplus economic unit (SEU) were to deal directly along with a deficit economic unit (DEU)?Usually, Surplus economi

    		•