Multiple Choice
High net worth helps to diminish the problem of moral hazard problem by
A) requiring the state to verify the debt contract.
B) collateralizing the debt contract.
C) making the debt contract incentive compatible.
D) giving the debt contract characteristics of equity contracts.
Correct Answer:
Verified
Correct Answer:
Verified
Q75: Financial intermediaries develop _ in things such
Q76: Of the sources of external funds for
Q77: In developing countries,it can be expensive and
Q78: The principal-agent problem<br>A)occurs when managers have more
Q79: The "lemons problem" exists because of<br>A)transactions costs.<br>B)economies
Q81: The presence of _ in financial markets
Q82: Explain the principal-agent problem as it pertains
Q83: Analysis of adverse selection indicates that financial
Q84: Of the following sources of external finance
Q85: How does a mutual fund lower transactions