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Money and Capital Markets: Financial Institutions and Instruments in a Global Marketplace, 8/e

Peter Rose, Texas A & M University

Consumer Lending and Borrowing

Standard & Poor's Questions

Chapter 23 in Money and Capital Markets: Consumer Lending and Borrowing

Question 1

Which businesses on the S&P Market Insight list appear to be among the heaviest borrowers of funds from households (individuals and families)? How do you know? Among the firms listed on Market Insight which tend to be among the heaviest lenders to consumers (individuals and families)? What makes you think so?

Question 2

One of the most important lender groups today active in household credit markets are consumer finance companies. Two of the largest represented on S&P’s Market Insight are Capital One Financial Corp (COF) and Providian Financial Corp (PVN). How do these financial firms seem to differ from more traditional consumer lenders, such as banks, savings and loan associations, and credit unions? Which of these two firms is the most profitable and carries the highest credit rating? Why do you think this is so?

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