Briefly describe the main types of financial institutions and explain their function.

Finance assignment

All essay questions should be written in your own words and appropriate references made where needed. Please follow the guidelines (e.g. word count) where appropriate and as much as possible. You are expected to submit all of your answers in one file prior to the stated deadline in a Word document.

  1. Briefly describe the main types of financial institutions and explain their function. (200 words max)
  2. Describe and explain the characteristics of the main money market instruments and discuss their advantages and disadvantages from the perspective of a bank needing to raise short-term borrowings. (200 words max)
  3. You have been asked by the prospective directors of a shortly to be established business what is meant by ordinary shares, preference shares and debt capital. Further, you have been asked to provide a brief explanation of their relative advantages and disadvantages as sources of funds to expand the business. Write an essay to assist these managers. (200 words max)
  4. On 1 September 2021 a company raises finance by agreeing a six-month eurodollar loan for $10 million offered at an interest rate of 2.8 per cent. Calculate the cost of the loan in dollars.
    on a 30/360-day count basis (180 days)
    on a 365-day count, actual/365 basis (183 days)
  5. You purchase $1,000,000 worth of six-month US Treasury bills on the secondary market with a quoted yield per annum of 0.94 per cent. The bills have 100 days to maturity. How much would you pay? Use the actual/365-day count convention.