1.Is poorly functioning financial market a reason for underdeveloped economies?

2.Why is a financial asset both an asset and a liability?

3.Primary markets help firms raise funds, so they are more important than secondary markets? True or False, explain?

4.What are the differences between mortgage and mortgage-backed securities?

5.Can moral hazards still exist if there is no information asymmetry?

6.If your friend borrows from the bank at 9%, why would you be more willing to lend to the bank at 3% instead to your friend at the much higher interest?

7.How do conflicts of interest make the asymmetric information problem worse, esp. in financial markets?