Factors that led to the credit crisis of 2007-2008 include one of the following: Select one: O a. bankers' follow the best practices to screen and monitor borrowers. O b. lack of information with regard to the engineering of ABS. O c. the stong banks balance sheets. O d. the immigration of workers to the US. Agency problem is best described by: O a. one person, called the agent, is performing some task on behalf of another person, called the principal. O b. there is a hidden characteristic. O c. there is a risk of a "lemon". O d. there is a hidden action of inappropriate behaviour by one of the parties to a transaction or agreement. Your parents purchased a new phone for your birthday. You didn't use the mobile for one month because you didn't like the colour. Finally, you decides to sell it on Open Souq. What is the best price you can get for this Iphone? O a. A price close to the original purchase price since it was not used. b. A small discount of 5% since it was purchased a month ago. O c. You will not be able to sell the iphone since no one uses these websies for trade, O d. The average price of a used iphone One of the following is an example of using money as a medium of exchange: O a. Purchasing clothes with your debit card. O b. Exchanging your iphone with a tablet. c. Keeping some of your wealth in a bank account O d. Comparing the costs in JDs of making a big part and of taking a short vacation to the dead sea. At first Hundai produced low quality cars then decided to improve the quality for their cars. In order to communicate the new improved quality of their cars, Hundai issued a warranty that protects consumers for 10 years. This example shows a case of: a. Information asymmetry situation solved by monitoring through issuing the warranty. b. Agency situation solved by a credible signal. c. Agency situation solved by monitoring. d. Information asymmetry situation solved by a credible signal. Clear my choice The financing from is much larger than the financing of ________ in all countries with varying relative importance of bond versus stock markets. Select one: O a. financial intermediaries: government agencies O b.government agencies; securities markets c. government agencies: financial intermediaries d. financial intermediaries: securities markets The problem of adverse selection helps to explain: Select one: a. why firms are less likely to obtain funds from banks and other financial intermediaries, rather than from securities markets. b. why lenders refuse loans to individuals with high net worth. c.good credit risks are more likely to seek loans causing lenders to make a disproportionate amount of loans to good credit risks. d. why collateral is an important feature of debt contracts. Government regulations designed to reduce the moral hazard problem associated with financing include: Select one: a.state licensing restrictions. b. laws that force firms to protect their employees. c. laws that force firms to increase their disclosure. d. allowing unions to organize. Which of the following statements is correct: o a. The ultimate goal of the financial system is to promote economic growth. b. A wealthy financial system helps in allocating funds to their best uses, thereby promoting economic efficiency c. A deficient financial system will lead to the optimal allocation of funds d. All of the statements are correct. Agency problem is best described by: a. one person, called the agent, is performing some task on behalf of another person, called the principal. b. there is a hidden characteristic. O c. there is a risk of a "lemon". d. there is a hidden action of inappropriate behaviour by one of the parties to a transaction or agreement. Factors that led to the credit crisis of 2007-2008 include one of the following: Select one: O a. bankers' follow the best practices to screen and monitor borrowers. O b. lack of information with regard to the engineering of ABS. O c. the stong banks' balance sheets. O d. the immigration of workers to the US. Your parents purchased a new phone for your birthday. You didn't use the mobile for one month because you didn't like the colour. Finally, you decides to sell it on Open Souq. What is the best price you can get for this Iphone? f O a. A price close to the original purchase price since it was not used. b. A small discount of 5% since it was purchased a month ago c. You will not be able to sell the iphone since no one uses these websies for trade. Od. The average price of a used Iphone One of the following is an example of using money as a medium of exchange: O a. Purchasing clothes with your debit card. O b. Exchanging your iphone with a tablet. Oc. Keeping some of your wealth in a bank account O d. Comparing the costs in JDs of making a big part and of taking a short vacation to the dead sea All of the following are goals of the regulation of financial markets EXCEPT: Select one: a. Decreasing the moral hazard problem. b. Ensuring the soundness of the financial system. c. Decreasing the adverse selection problem. d. Ensuring that investors never suffer losses At first Hundai produced low quality cars then decided to improve the quality for their cars. In order to communicate the new improved quality of their cars, Hundal issued a warranty that protects consumers for 10 years. This example shows a case of: Sf a. Information asymmetry situation solved by monitoring through issuing the warranty. O b. Agency situation solved by a credible signal. . C. Agency situation solved by monitoring. d. Information asymmetry situation solved by a credible signal. Clear my choice Fill in the Blank: During the crisis of 2007, banks pooled some of their assets and repackaged them as interest- bearing securities. In this process, the bank transfers the assets and their credit risk from its balance sheet. This will create (choose and copy one of the following terms: adverse selection; moral hazard; agency problem; transaction costs; free-rider problem)