Q: As supplier of funds, households invest by purchasing cars or houses. Is it true or false?
A: Individuals or firms who save or make investments in the financial market are the suppliers of funds…
Q: What is full form of ERISA? Describe about it.
A: The full form of ERISA is the Employee Retirement Income Security Act which was established in the…
Q: Why do you think pawnshops are gaining momentum in the financial service industry
A:
Q: When a borrower plays poker with borrowed funds, the lender is facing an adverse selection problem.…
A: When a borrower plays poker with borrowed funds, the lender is facing an adverse selection problem.…
Q: How does derived demand create volatiledemand?
A: As economies emerged, goods and services were produced that required machinery and labour. For…
Q: How does risk sharing benefit both financial intermediaries and private investors?
A: Risk-sharing - risk sharing is a method of sharing risk between the participants.
Q: Would usury laws help or hinder resolution of a shortage in financial markets?
A: Usury law is implemented by the government pertaining to interest on the loans taken by the…
Q: What happens when the "Tax Ratio" of the commercial banks in the positive figure?
A: The Tax Ratio is the most strong indicator of a person's tax efficiency. The tax ratio is the…
Q: In which form of business ownership is the principal-agent problem likely to be the greatest…
A: Business: An organization by which goods or services are sold for earning profit.
Q: “Fat finger” trades are sometimes blamed as the cause of “flash crashes” in financial markets. What…
A: What is a Flash Crash? A flash crash can be defined as an occasion in electronic protections…
Q: Imagine that you own your business. Imagine further that you or your consumers face an asymmetric…
A: a)Assymetric information is a problem where consumers face the problem of assymetric information.In…
Q: List three different ways that a risk-averse person can reduce financial risk.
A: Financial Risk would result in the risk which would be borne by the investor which results in the…
Q: Can we trust financial intermediaries?
A: In most cases, financial intermediates function as middlemen in transactions involving banks or…
Q: What are some ways a seller of labor (that is, someone looking for a job) might reassure a possible…
A: A labor market is a place where the people who are willing to work at the prevailing market wage…
Q: ancial institutio
A: At the large financial institutions,compensation practices were considered to be a key contributing…
Q: Are capital flow management and macroprudential measures the same thing?
A: In a market, researchers and policymakers use different methods or approaches to analyze a specific…
Q: How can an inaccurate estimate of assets have serious consequences?
A: Answer - Estimates of assets - It is approximate value of assets of original value of assets which…
Q: How can imperfect information distort markets (i.e. make them less efficient)?
A: complete information about operations in the market is a key element that makes any market…
Q: How do information asymmetries affect financing decisions?
A: Answer - Asymmetric Information - This is th situation where one individual, firm or even country…
Q: Financial institutions “hedge” to reduce: A. transactions cost B. diseconomies of scale C. risk D.…
A: Answer: Hedging is an investment done to reduce the risk associated with an investment. For…
Q: What effect might a fall in stock prices have on businessinvestment?
A: Stock prices are a price at which the stock is being exchanged in the stock market. Stock market is…
Q: Is Dismal theorem is better than stern review?
A: The Economics of Climate Change is concerned with the identification and measurement of the diverse…
Q: A type of financial innovation designed to get around regulations is called
A: Financial innovation is a act of creating new financial instruments as well as new financial…
Q: What is the difference between an asset and liability?
A: In economics and also in business(accounting), it is vital to weigh the assets that a company owns…
Q: How do economists define equilibrium in financial markets?
A: The price is the difference between what providers receive and what demanders pay in any market.…
Q: How do standardized accounting principles help financial markets work more efficiently?
A: Adverse selection problem refers to the costs to one party in a market transaction that arises due…
Q: What are moral hazard and adverse selection? How are they similar, how are they different? What…
A: Asymmetric information refers to the situation when there is incomplete information or knowledge in…
Q: Financial institutions such as banks are prohibited from investing their funds in the stock market…
A: Financial institutions such as banks are prohibited from investing their funds in the stock market…
Q: Identify if claim of policy, claim of value, or claim of fact. Explain a little bit.
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: A news story criticized corporate ethics codes, saying that they had no impact upon corporate…
A: The essential components of a code embody assurances of support for the policies from structure…
Q: What are adverse selection and moral hazard?
A: Adverse selection:- show that typically to a scenario during which sellers have data that consumers…
Q: Can you speculate on what a “vicious circle” might be?
A: Vicious circle of poverty is the situation where the tendency of act and react one another that…
Q: Would the interest rate increase be more likely to hurt or help the financial institution’s…
A: Interest rates affect the profitability of financial institutions. The financial institutions…
Q: How can financial institutions overcome the inevitable mobility of students after graduation?
A: A financial institution is an organization that deals in several forms of monetary transactions,…
Q: Provide a real-world example of "Adverse Selection" in a business or financial transaction.
A: Adverse selection occurs when one party has more information than the other engaged in a business or…
Q: How dose a bank plays a role in inverstment
A: A bank is a financial entity with the authority to accept deposits and provide loans. Retail banks,…
Q: Can the principal agent problem be avoided
A: The PA (principal-agent) problem demonstrates a scenario where an entity or person is making a…
Q: What are the examples of uses of derivatives in economics?
A: Meaning of Economics: The term economics refers to the situation under which there remain…
Q: If not for a great deal of corporate wrongdoing, there would probably be no FCPA. True or False?
A: FCPA (Foreign Corruption Protection Act) mainly stands for the law related to corruption. FCPA was…
Q: Suppose you have data about two groups of countries,one with efficient legal systems and the other…
A: Adverse selection applies to a different knowledge issue that happens before the sale for all…
Q: How can asymmetric information problems lead to abank panic?
A: Asymmetric information refers to the situation when there is a lack of information in the market…
Q: In economic terms, what does quantitative easing actually do?
A: The goal of the monetary policy of the central bank is to control the amount of money in the…
How are liquidated damages related to consequential damages?
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