Question 1

Specialized lending is intended to minimize adverse selection problems.

Accepted Answer

A) True 
 B)False

Question 2

Does screening help minimize adverse selection of moral hazard problems? Explain briefly.

Accepted Answer

Screening is the process of de

Question 3

Most external finance is channeled through intermediaries because of

Accepted Answer

A)  asymmetric information. 
B)  agency costs. 
C)  monitoring costs. 
D)  none of the above. 
A)  asymmetric information. 
B)  agency costs. 
C)  monitoring costs. 
D)  none of the above.

Question 4

To mitigate agency problems, the incentives of the employees should be closed aligned with the employer.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is an example of a source of internal finance?

Accepted Answer

A)  corporate bonds 
B)  withheld earnings 
C)  commercial loans 
D)  none of the above 
A)  corporate bonds 
B)  withheld earnings 
C)  commercial loans 
D)  none of the above

Question 6

Which of the following is a technique lenders use to alleviate the adverse selection problem?

Accepted Answer

A)  screening 
B)  monitoring borrower activity 
C)  legal restrictions on the use of funds 
D)  all of the above 
A)  screening 
B)  monitoring borrower activity 
C)  legal restrictions on the use of funds 
D)  all of the above

Question 7

Interest on loans is an example of a transactions cost that intermediaries can deal with more efficiently than individuals.

Accepted Answer

A) True 
 B)False

Question 8

Laws against fraudulent reporting on financial documents are an attempt to reduce agency problems.

Accepted Answer

A) True 
 B)False

Question 9

Transactions costs are

Accepted Answer

A)  broker commissions. 
B)  legal fees. 
C)  monitoring costs. 
D)  all of the above. 
A)  broker commissions. 
B)  legal fees. 
C)  monitoring costs. 
D)  all of the above.

Question 10

Sarbanes-Oxley may have unintentionally increased

Accepted Answer

A)  asymmetric information. 
B)  allocational efficiency. 
C)  transactions costs. 
D)  all of the above. 
A)  asymmetric information. 
B)  allocational efficiency. 
C)  transactions costs. 
D)  all of the above.

Question 11

What does IPO stand for? What is it?

Accepted Answer

IPO stands for initi

Question 12

Most external financing comes from bonds and equities.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following does NOT involve a financial intermediary?

Accepted Answer

A)  saving for retirement 
B)  buying a treasury bond from the government 
C)  buying stock online 
D)  all of the above 
A)  saving for retirement 
B)  buying a treasury bond from the government 
C)  buying stock online 
D)  all of the above

Question 14

Banks are said to ration credit when they refuse to lend above a certain interest rate. The purpose of such a policy is to minimize _____ of lending.

Accepted Answer

A)  adverse selection problems 
B)  moral hazard problems 
C)  transactions costs 
D)  all of the above 
A)  adverse selection problems 
B)  moral hazard problems 
C)  transactions costs 
D)  all of the above

Question 15

When a child saves her allowance to buy a toy, she is engaged in external finance.

Accepted Answer

A) True 
 B)False

Specialized lending is intended to minimize adverse selection problems.

Does screening help minimize adverse selection of moral hazard problems? Explain briefly.

Most external finance is channeled through intermediaries because of

To mitigate agency problems, the incentives of the employees should be closed aligned with the employer.

Which of the following is an example of a source of internal finance?

Which of the following is a technique lenders use to alleviate the adverse selection problem?

Interest on loans is an example of a transactions cost that intermediaries can deal with more efficiently than individuals.

Laws against fraudulent reporting on financial documents are an attempt to reduce agency problems.

Transactions costs are

Sarbanes-Oxley may have unintentionally increased

What does IPO stand for? What is it?

Most external financing comes from bonds and equities.

Which of the following does NOT involve a financial intermediary?

Banks are said to ration credit when they refuse to lend above a certain interest rate. The purpose of such a policy is to minimize _____ of lending.

When a child saves her allowance to buy a toy, she is engaged in external finance.

The Financial System

Money

Interest Rates

The Economics of Interest-Rate Fluctuations

The Economics of Interest-Rate Spreads and Yield Curves

Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities

Bank Management

Innovation and Structure in Banking and Finance

The Economics of Financial Regulation

Financial Derivatives

Financial Crises: Causes and Consequences

Central Bank Form and Function

The Money Supply Process and the Money Multipliers

Monetary Policy Tools

Monetary Policy Targets and Goals

Foreign Exchange

International Monetary Regimes

Money Demand

Is-Lm

Is-Lm in Action

Aggregate Supply and Demand and the Growth Diamond

Monetary Policy Transmission Mechanisms

Inflation and Money

Rational Expectations Redux: Monetary Policy Implications

Filters

Exam 8: Financial Structure, Transaction Costs, and Asymmetric Information

Specialized lending is intended to minimize adverse selection problems.

Does screening help minimize adverse selection of moral hazard problems? Explain briefly.

Most external finance is channeled through intermediaries because of

To mitigate agency problems, the incentives of the employees should be closed aligned with the employer.

Which of the following is an example of a source of internal finance?

Which of the following is a technique lenders use to alleviate the adverse selection problem?

Interest on loans is an example of a transactions cost that intermediaries can deal with more efficiently than individuals.

Laws against fraudulent reporting on financial documents are an attempt to reduce agency problems.

Transactions costs are

Sarbanes-Oxley may have unintentionally increased

What does IPO stand for? What is it?

Most external financing comes from bonds and equities.

Which of the following does NOT involve a financial intermediary?

Banks are said to ration credit when they refuse to lend above a certain interest rate. The purpose of such a policy is to minimize _____ of lending.

When a child saves her allowance to buy a toy, she is engaged in external finance.

The Financial System

Money

Interest Rates

The Economics of Interest-Rate Fluctuations

The Economics of Interest-Rate Spreads and Yield Curves

Rational Expectations, Efficient Markets, and the Valuation of Corporate Equities

Bank Management

Innovation and Structure in Banking and Finance

The Economics of Financial Regulation

Financial Derivatives

Financial Crises: Causes and Consequences

Central Bank Form and Function

The Money Supply Process and the Money Multipliers

Monetary Policy Tools

Monetary Policy Targets and Goals

Foreign Exchange

International Monetary Regimes

Money Demand

Is-Lm

Is-Lm in Action

Aggregate Supply and Demand and the Growth Diamond

Monetary Policy Transmission Mechanisms

Inflation and Money

Rational Expectations Redux: Monetary Policy Implications

Filters