Fill the blank with the correct word from the word blank

Because of the adverse selection problem in the financial market, a firms newly issued stocks or bonds could be ( ) so that the firm would withdraw from the market. It will leave only the ( ) credit firms in the market.

To solve the asymmetric information problem between the lenders and borrowers, ( ) could be used as a good mechanism for ensuring that a borrower is likely to repay a lender.

word bank:

over-valued, under-valued, internal, external, directly, indirectly, GNP, GDP, information, confidence, good, bad, average, assets, liabilities, capital, revenues, expenses, costs, profits, net worth, resources, data, collateral,

Which of the following statements is NOT true about the balance sheet of commercial banks?

Banks obtain the funds from depositors as well as by borrowings

Banks use these funds to make loans or to purchase marketable securities

The difference between a banks assets and liabilities is the banks profit

The banks profit also come from service fees

Some of the banks profit-making activities do not appear on the balance sheet of the bank. These activities are called ( ).

Profit generator

Hidden card operation

Off-balance sheet activities

Off-income statement items