| Course | FIN 335 Financial Markets |
|---|---|
| Module | Module 1 |
| Paper type | undergraduate discussion post on the role of financial markets and intermediaries |
| Length | About 360 words, 3 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | BS Finance |
| Updated | October 2026 |
Free sample paper for FIN 335 Module 1
Module One Discussion
Following One Dollar Through a Billings Bank
Picture a rancher outside Roundup depositing a cattle sale check at a community bank headquartered in Billings, Montana. The bank I am using for this course is a composite with $2.4 billion of assets and 31 branches across Montana and northern Wyoming. That dollar joins about $1.9 billion of deposits, about 31 percent of them above the $250,000 federal insurance limit, from families, ranchers and small businesses. From there, roughly 77 cents ends up in loans, such as an operating loan to a wheat farm near Great Falls or a credit line for a veterinary clinic in Sheridan, and much of the rest sits in bonds, including Treasury securities, until it is needed.
The rancher could not lend directly to the farm or the clinic, and the bank makes the connection possible in four ways. It pools many small deposits into loans large enough for a business. It screens borrowers: its agricultural lenders know local yields and cattle prices in a way no individual depositor could. It transforms maturities, turning deposits that can be withdrawn any day into loans that run for years. And it provides liquidity, so the rancher can still write a check tomorrow. Mishkin and Eakins (2018) describe these as the core reasons indirect finance through intermediaries is larger than direct finance through markets for most households and small firms.
Maturity transformation is also the risk. Diamond and Dybvig (1983) showed that because loans cannot be sold quickly at full value, a bank funded by withdrawable deposits can fail if enough depositors run at once, even when its loans are sound. Deposit insurance is meant to prevent that. Drechsler et al. (2021) add a reason most banks survive rising rates: many depositors leave money in low-paying accounts out of convenience, so deposit costs rise slowly. When that convenience disappeared quickly at a few banks in 2023, they failed within days.
Pick an account you use, such as checking, a retirement plan or a credit union savings account. Where do you think your dollar is right now, and what would happen to it if everyone asked for their money back at once?
References
Diamond, D. W., & Dybvig, P. H. (1983). Bank runs, deposit insurance, and liquidity. Journal of Political Economy, 91(3), 401-419. https://doi.org/10.1086/261155
Drechsler, I., Savov, A., & Schnabl, P. (2021). Banking on deposits: Maturity transformation without interest rate risk. The Journal of Finance, 76(3), 1091-1143. https://doi.org/10.1111/jofi.13013
Mishkin, F. S., & Eakins, S. G. (2018). Financial markets and institutions (9th ed.). Pearson.
What the FIN 335 Module 1 instructions ask for
The first FIN 335 discussion usually asks why financial markets and institutions exist and what functions they perform, sometimes with a request to compare direct finance through markets with indirect finance through intermediaries such as banks. A strong post goes beyond listing functions by showing them at work in one institution or transaction: who saves, who borrows, what the intermediary does in between and what could go wrong. It draws on one or two sources and closes by giving classmates a way to test the idea on their own accounts. Some versions also ask you to describe the main types of financial institutions, so be ready to name where banks sit beside insurers, funds and brokers.
How this FIN 335 Module 1 discussion example is built
The post follows a dollar deposited by a rancher in a composite Billings bank with $2.4 billion of assets. Pooled with thousands of other deposits, it helps fund a seed loan to a wheat farm, a credit line for a veterinary clinic and a Treasury bond. The post explains four things the bank adds: pooling small sums, turning deposits that can leave any day into loans that last years, screening borrowers and providing liquidity. It notes that the second function creates risk, as Diamond and Dybvig showed and the 2023 bank failures confirmed. The post closes by asking classmates where their own dollar is right now and what would happen if everyone asked for their money back at once.
Where the FIN 335 Module 1 rubric puts the points
Graders of this opening discussion typically weigh accurate explanation of the functions of financial markets and intermediaries, use of a specific example, understanding of the risks involved, use of sources and the quality of replies. Strong posts show each function at work rather than defining it, distinguish direct from indirect finance and recognize that intermediation carries risk. Posts lose points for textbook lists without application, for missing the risk side of banking and for replies that do not add a new example or question. Some instructors also reward posts that use a current event, such as the 2023 bank failures, to show why the risk matters.
FIN 335 Module 1 help: the mistakes that cost points
Students often list the functions of the financial system from the chapter. Choose one institution or transaction and show the functions inside it instead. A bank, a credit union or a retirement plan all work. Name the saver and the borrower, then explain what each would have to do without the intermediary. Add one risk the intermediary takes on, since that sets up later modules on interest rates and regulation. In replies, ask a classmate what would happen to their example if depositors all wanted their money back at once. Keep figures approximate in a discussion post, but make them realistic for the kind of institution you describe. One accurate source on bank runs or deposit insurance is enough.
Get FIN 335 Module 1 written to your instructions
Send us the FIN 335 Module 1 discussion question. We show what intermediaries do through one real-seeming institution, name the risk that comes with it and pose a closing question to peers. Expect it within two days, and we write your first post free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
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FIN 335 Module 1 questions, answered
Where can I find a free FIN 335 Module 1 Discussion sample?
This page includes the full FIN 335 Module 1 post tracing deposits through a community bank to show what intermediaries do.
What is financial intermediation?
The process by which institutions such as banks collect funds from savers and lend or invest them for borrowers, adding pooling, screening, maturity transformation and liquidity.
What is the difference between direct and indirect finance?
In direct finance, borrowers sell securities straight to savers through markets; in indirect finance, an intermediary such as a bank stands between them.
What is maturity transformation?
Funding long-term loans and investments with short-term deposits that can be withdrawn at any time, which earns a spread but exposes the bank to runs and rate changes.
Why do banks screen borrowers?
Because savers cannot easily judge borrowers' creditworthiness, and banks can gather information, set terms and monitor loans at lower cost.