23. Mishkins analysis of adverse selection indicates that financial intermediaries in general and banks in particular , because they hold a large fraction of non-traded loans,

a. Play a greater role in moving funds to corporations than do securities markets as a result of their ability to overcome the free-rider problem

b. Provide better known and larger corporations a higher percentage of their external funds than they do to newer and smaller corporations , which tend to rely on the new issues markets for funds.

c. Both (a) and (b) of the above

d. Neither (a) nor (b) of the above

24. The principal agent problem arises because

a. Principals find it difficult and costly to monitor agents activities

b. Agents incentives are not always comparable with those of the principals.

c. Principals have incentives to free-ride off the monitoring expenditures of other principals

d. Of all of the above

e. Of only (a) and (b) of the above