1) Present value calculations: _______.

A) are appropriate for investments in the same time period

B) are accurate only in a low-rate environment

C) provide comparisons for investments when inflation is known

D) provide a common reference for measuring investments at different maturities

7) Banks deal with problems of adverse selection by: _______.

A) gathering financial information about the borrower

B) making only short-term loans

C) only lending to existing customers

D) charging higher interest rates