THE ECONOMICS OF MONEY,BANKING, AND FINANCIAL MARKETS 344

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PA R T I I I

Financial Institutions

16. How do hedge funds differ from mutual funds?
*17. How do private equity funds escape the free-rider
problem?

18. What are the four advantages of private equity
funds?
*19. How have GSEs in the United States exposed taxpayers to large losses?

WEB EXERCISES
1. The Office of the Superintendent of Financial
Institutions (OSFI) maintains extensive data on insurers. Go to www.osfi-bsif.gc.ca and click on Life
Insurance Companies & Fraternals and then on
Financial Data Life Insurance Companies.
a. Do life insurance companies make more mortgage loans than they invest in bonds and debentures?
b. Which type of asset has grown most rapidly over
the last five years?
c. Repeat (a) and (b) for property and casualty
insurers.

2. OSFI also maintains extensive data on nondepository
credit intermediaries (known as finance companies).
Go to its website at the address above, locate the
data, and answer the following questions.
a. Do finance companies make more personal
loans than business loans?

b. Do they borrow more from the money market
than the bond market?
c. Which type of asset has grown most rapidly over
the last five years?

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