WorksheetsKiểm Tra Thực Hành 2: Vai Trò của Trung Gian Tài Chính
Total questions: 49
Worksheet time: 57mins
Financial markets channel funds from savers to borrowers, promoting economic efficiency.
True
False
Commercial banks are the most important financial intermediaries in the economy.
True
False
Investment banks assist in the initial sale of securities in the primary market.
True
False
The primary market is where previously issued securities are traded.
True
False
Insurance companies primarily deal with short-term financial instruments.
True
False
Money markets are for long-term debt instruments.
True
False
Mutual funds pool resources from many investors to buy diversified portfolios of securities.
True
False
The secondary market increases the liquidity of financial instruments.
True
False
Financial institutions reduce transaction costs through economies of scale.
True
False
A diversified portfolio eliminates all types of risk.
True
False
Higher inflation typically leads to lower nominal interest rates to maintain real returns.
True
False
Moral hazard occurs before the transaction.
True
False
The Federal Reserve System is the central bank of the United States.
True
False
Adverse selection occurs before a transaction takes place.
True
False
A well-functioning financial system is essential for economic growth.
True
False
A financial intermediary increases the direct connection between savers and borrowers.
True
False
The primary purpose of venture capital is to provide loans to large corporations.
True
False
High transaction costs typically increase market efficiency.
True
False
Financial innovation can improve the efficiency of financial markets.
True
False
Financial intermediaries help reduce transaction costs.
True
False
Financial markets facilitate the transfer of risk.
True
False
Principal-agent problems are a form of moral hazard where agents may act in the best interests of principals.
True
False
Only borrowers face moral hazard in financial transactions.
True
False
Transaction costs are always fixed and do not vary with the size of the transaction.
True
False
Economies of scale can reduce transaction costs in financial markets.
True
False
Moral hazard occurs after a transaction has taken place.
True
False
Monitoring is a tool used to mitigate moral hazard.
True
False
Transaction costs only include monetary fees.
True
False
Adverse selection is not an issue in well-regulated financial markets.
True
False
Only buyers incur transaction costs.
True
False
Only buyers incur transaction costs.
True
False
Government guarantees can increase moral hazard in the banking sector.
The more collateral there is backing a loan, the less the lender has to worry about adverse selection. Is this statement true, false, or uncertain? Explain your answer.
How can economies of scale help explain the existence of financial intermediaries?
Describe two ways in which financial intermediaries help lower transaction costs in the economy.
Pooling Resources: They aggregate funds from many individual savers and investors, allowing for larger transactions that reduce per-unit costs through economies of scale.
Specialization and Expertise: Intermediaries employ specialized professionals who efficiently assess risks, evaluate creditworthiness, and manage investments.
Would moral hazard and adverse selection still arise in financial markets if information were not asymmetric?
What are the two ways that spikes in interest rates lead to an increase in adverse selection and moral hazard problems?
Adverse Selection: Drives out safe borrowers, leaving riskier ones.
Moral Hazard: Borrowers take riskier actions to repay costly loans.
True, false, or uncertain: Financial engineering always leads to a more efficient financial system.
How can a currency crisis lead to higher interest rates?
Which firms are most likely to use bank financing rather than to issue bonds or stocks to finance their activities? Why?
How can the existence of asymmetric information provide a rationale for government regulation of financial markets?
How does the free-rider problem aggravate adverse selection and moral hazard problems in financial markets?
When can a decline in the value of a country’s currency exacerbate adverse selection and moral hazard problems? Why?
How does a general increase in uncertainty as a result of a failure of a major financial institution lead to an increase in adverse selection and moral hazard problems?
Would you be more willing to lend to a friend if she put all of her life savings into her business than you would if she had not done so? Why?
Rich people often worry that others will seek to marry them only for their money. Is this a problem of adverse selection?
Manulife insurance company is concerned about adverse selection when offering health insurance policies. How can Manulife mitigate the risk of attracting predominantly high-risk individuals?
Use screening, health disclosures, waiting periods, and varied premium plans to reduce adverse selection.
Ignore the risk and proceed with standard policies.
Increase premiums for all applicants regardless of risk.
Offer no coverage to high-risk individuals.
BIDV is considering providing a large loan to a new startup. However, the bank is concerned that once the loan is granted, the startup might engage in riskier business activities than initially promised. What measures can BIDV take to prevent moral hazard?
Use covenants, monitoring, and collateral to ensure responsible behavior post-loan.
Trust the startup to act responsibly.
Provide unlimited funds without restrictions.
Only lend to established businesses.
LET, a small business, is looking to raise funds through issuing bonds. However, the costs associated with issuing the bonds are substantial. How do these transaction costs affect the small business, and what can it do to mitigate these costs?
High costs discourage small issuers. Alternatives: bank loans, private placements, or joint issues to reduce expenses.
Transaction costs have no effect on small businesses.
Small businesses should only issue bonds regardless of costs.
They can ignore transaction costs and proceed.
