1. explain the role of investment structures in the creation of moral hazard within financial institutions.

2. How might a Modigliani-Miller result contribute to an explanation as to why banks cannot self-regulate themselves with respect to bad debts that can lead to crashes and meltdowns.

3. In the regulation of derivatives that existed in 2008, compare and contrast the advantages and disadvantages of contracts for derivatives over a system that permits trades of derivatives within a market.