Discussion:
Part 1
Please respond to the following:
• Go to the SEC Website to read the article "Hedging Your Bets: A Heads Up on Hedge Funds and Funds of Hedge Funds," located at https://www.sec.gov/answers/hedge.htm. Support your position with examples or evidence.
• What might be some advantages for a consumer to borrow from a finance company versus a commercial bank or thrift?
Part 2 respond to statement
Borrowing from a finance company is preferable compared to borrowing from a bank or thrift. The finance companies have better terms compared to a commercial bank and thrifts. Essentially, the finance companies are not dealing with the real cash loans and this makes them have little or no risk involved. This allows companies to offer better deals compared to the commercial banks. For example, the finance companies can offer cash rebates, super-low interests and better terms for the loan issued.
The finance companies offer loans on their products and this means the issue of credit history is not looked at compared to the commercial banks. Finance companies are willing to provide challenged loans because of the decreased risk that they have in lending money for their own products. In commercial banks, credit history is a crucial determining factor for getting a bank loan. Poor credit can pose an obstacle against favorable loan terms or even for securing a loan at all. Contrary to a finance company, credit is not an issue because they bear low risks. For example, one can choose to secure an item from the company and then make small payments on the property
References
https://www.bankrate.com/banking/thrifts-vs-traditional-banks-whats-the-difference/
https://www.sec.gov/fast-answers/answershedgehtm.htm