Exam 9: Transactions Costs, Asymmetric Information, and the Structure of the Financial System

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Which of the following is NOT an example of adverse selection?

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Which of the following is NOT true of adverse selection?

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All of the following are consequences of adverse selection on good firms EXCEPT

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By reducing transactions and information costs, financial intermediaries can

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In the late 2000s, which of the following was the primary source of external financing for small to medium-size firms?

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How do car dealers help reduce adverse selection?

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Due in part to record low interest rates on U.S. Treasury Bonds,

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A firm's principals are its

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How does adverse selection in financial markets affect the method by which firms raise funds?

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It is generally agreed that

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When managers do not own very much of the net worth of the firm, then

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Economies of scale are

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Transactions costs are

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The "lemons problem" is overcome in the used car market by

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One method that lenders use to mitigate the adverse selection problem is to

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In the United States the stake of top management in firms' ownership usually is

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Which of the following is the most important source of external financing for corporations?

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Which of the following is NOT true of restrictive covenants?

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When interest rates in the bond market rise,

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How does adverse selection affect the economic efficiency of the used car market?

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