Exam 8: An Economic Analysis of Financial Structure

External financing by ________ should be more important in developing countries than in industrialized countries because information about private firms is more difficult to collect in developing countries.

Which of the following is NOT one of the eight basic puzzles about financial structure?

Which of the following is NOT a benefit to an individual purchasing a mutual fund?

Financial intermediaries' low transaction costs allow them to provide ________ services that make it easier for customers to conduct transactions.

A problem for equity contracts is a particular type of ________ called the ________ problem.

That most used cars are sold by intermediaries (i.e. ,used car dealers)provides evidence that these intermediaries

A borrower who takes out a loan usually has better information about the potential returns and risk of the investment projects he plans to undertake than does the lender. This inequality of information is called

A clause in a mortgage loan contract requiring the borrower to purchase homeowner's insurance is an example of a

The primary loan customer of state-owned banks in developing and transition economies is often

Tools to help solve the adverse selection problem in financial markets include all of the following EXCEPT

Because of the weak systems of property rights in many developing and transition economies,the financial system is unable to use collateral effectively worsening the ________ problem.

Of the sources of external funds for nonfinancial businesses in the United States,loans from banks and other financial intermediaries account for approximately ________ of the total.

One reason China has been able to grow so rapidly even though its financial development is still in its early stages is

Equity contracts

Debt contracts

Which of the following statements concerning external sources of financing for nonfinancial businesses in the United States are TRUE?

Commercial and farm mortgages,in which property is pledged as collateral,account for

The principal-agent problem would not occur if ________ of a firm had complete information about actions of the ________.

Because of the adverse selection problem

That only large,well-established corporations have access to securities markets