Several market participants interact in developed markets to organize the exchan

Question

Several market participants interact in developed markets to organize the exchange of funds from buyers to sellers. Such institutions as investment banks, commercial banks, financial services corporations, credit unions, pension funds, life insurance companies, mutual funds, exchange traded funds, hedge funds, and private equity companies play a key role in facilitating these transfers. Identify the financial institution based on each description given in the following table: Description Financial Institution They underwrite, distribute, and design investment securities for corporations to help them raise capital. They are established by an employer to facilitate and organize employee retirement funds. They are asset pools that invest in securities that have a potential to give stable returns. They collect a pool of funds from investors for the purpose of diversifying risk, earning interest or dividends, and/or generating profits from the investments' increased value.

Explanation / Answer

1: Invetment banks

(They perform ancillary functions which help companies to raise capital in the stock market)

2: Pension funds

(They are created by employers. The purpose is to support employees in collecting funds which are given at the time of retirement)

3: mutual funds

Mutual funds are pool of funds collected from divesrse investors. The amount so collected is invested in diverse areas and the return generated in the form of interest/ dividend is distributed among the members.

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