Business Finance
Chapter 2 The Role of Financial Markets and Financial Intermediaries
2.2 Financial Intermediaries
Financial Intermediaries - Business Finance - ثاني ثانوي
PART 1
Chapter 1 An Introduction to Basic Finance
Chapter 2 The Role of Financial Markets and Financial Intermediaries
Chapter 3 Analysis of Financial Statements
PART 2
Chapter 4 An Introduction to Financial Markets
Chapter 5 Opportunity Costs and the Time Value of Money
Chapter 6 Risk and Its Measurements
Chapter 7 Stock and Bonds
Financial Intermediaries
As has been discussed, one purpose of financial markets
2.2a The Investment Bank
Why is investment often essential to help a business grow?
Thus, syndication makes possible both the sale
Instead of supporting the price, the underwriters
2.2b The Indirect Transfer Through Financial Intermediaries
the saver had lent the funds directly to the ultimate users
2.2c Commercial Banks
Most loans to firms and households are
While Figure 2.8 shows the various sources of funds available
2.2d Other Financial Intermediaries
Insurance Companies
FIGURE 2.9 Some Types of Insurance Available in Saudi Arabia
Pension Plans
2.2e Money Market Mutual Funds and Money Market Instruments
Even though most mutual funds are not financial intermediaries,
Money market mutual fund
Commercial paper
Repurchase agreement (repo)
Banker’s acceptances are short-term promissory notes guaranteed
Banker’s acceptances
2.2f Competition for Funds
Why is the source of funds important to every financial intermediary?
From the standpoint of the borrowers,
As this discussion implies, financial intermediaries compete with each other for funds.
The first sale of common stock for a company is referred to as an initial public offering (IPO).
Financial intermediaries, such as commercial banks,
A sale of a security in which the seller agrees to buy back (repurchase)
