Map of Keng Tung on One of the premises of the theory of finance is that informational problems give rise to financial institutions that attempt to mitigate these problems. The problems originate from the prevalence of asymmetric information, whereby one of the parties to a financial contract commands more or better information about the possible outcomes of the contract. Consider, for example, a bank loan. Deposit-taking banks intermediate between depositors (net savers) and firms (net spenders), and this intermediation typically takes the form of a loan contract. The contract stipulates the amount of the loan (principal), the maturity date, and the interest payment dates and amounts. The difference between the interest received from the loan and the interest paid to the depositors is the net revenue of the bank. The bank faces a default risk. Map of Keng Tung 2016.
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Map of Keng Tung Holiday Map Q.