How does the amount of equity as a percentage of assets compare for finance companies and commercial banks? What accounts for the difference?
Answer to relevant QuestionsWhat are the major assets and liabilities held by finance companies?What is the adverse selection problem? How does adverse selection affect the profitable management of an insurance company?How do state guarantee funds for life insurance companies compare with deposit insurance for depository institutions?What does the loss ratio measure? What has been the long-term trend of the loss ratio? Why?You deposit $ 10,000 annually into a life insurance fund for the next 10 years, after which time you plan to retire. a. If the deposits are made at the beginning of the year and earn an interest rate of 8 percent, what will ...
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