Question 2 2.5 pts Continuing with the information about Columbia: Now, we enter Stage One, where information is asymmetric, but bond buyers assume no firms have yet left the market as a result. Because information is asymmetric, bond buyers demand a return of 15% ($115,000 total) to buy the bond. What is the required minimum potential return bond buyers will demand to buy bonds under these conditions, taking into account firm risk? Carefully follow all numeric instructions. Question 3 2.5 pts Continuing with the information about Columbia: Select the firm(s) that will issue bonds in Stage One, where conditions are as listed above. You must select all applicable firms (if there's more than one) to get the points for this question. Heckle Jackle Ickle No firms will issue bonds. Question 4 2.5 pts Continuing with the information about Columbia: As in our examples we'll assume that firms we said wouldn't issue in the previous question end up dropping out of the market. Nothing else changes in terms of bond buyer requirements. Considering what firm/firms is/are left as Stage One ends and we begin the next stage, what percentage chance of success will buyers use when making calculations? Carefully follow all numeric instructions. Enter your answer "as a percent, but without the percentage sign." In other words, if your answer is 99.99%, enter only 99.99 in the blank. D Question 5 2.5 pts Continuing with the information about Columbia: Now we're in Stage Two, with the assumptions we stated in the last question. What is the new required minimum potential return bond buyers will demand to buy bonds under these conditions, taking into account firm risk? Carefully follow all numeric instructions. Question 6 2.5 pts Continuing with the information about Columbia: Select the firm(s) that will issue bonds in Stage Two, where conditions are as listed above. You must select all applicable firms (if there's more than one) to get the points for this question. Heckle Jackle Ickle No firms will issue bonds. > Question 7 2.5 pts This is the last question about Columbia. At the end of Stage Two, will market failure have occurred? Why or why not? Yes, because no firms will issue bonds. No, because no firms will issue bonds. Yes, because at least one firm still issues a bond. No, because at least one firm still issues a bond. Question 2 2.5 pts Continuing with the information about Columbia: Now, we enter Stage One, where information is asymmetric, but bond buyers assume no firms have yet left the market as a result. Because information is asymmetric, bond buyers demand a return of 15% ($115,000 total) to buy the bond. What is the required minimum potential return bond buyers will demand to buy bonds under these conditions, taking into account firm risk? Carefully follow all numeric instructions. Question 3 2.5 pts Continuing with the information about Columbia: Select the firm(s) that will issue bonds in Stage One, where conditions are as listed above. You must select all applicable firms (if there's more than one) to get the points for this question. Heckle Jackle Ickle No firms will issue bonds. Question 4 2.5 pts Continuing with the information about Columbia: As in our examples we'll assume that firms we said wouldn't issue in the previous question end up dropping out of the market. Nothing else changes in terms of bond buyer requirements. Considering what firm/firms is/are left as Stage One ends and we begin the next stage, what percentage chance of success will buyers use when making calculations? Carefully follow all numeric instructions. Enter your answer "as a percent, but without the percentage sign." In other words, if your answer is 99.99%, enter only 99.99 in the blank. D Question 5 2.5 pts Continuing with the information about Columbia: Now we're in Stage Two, with the assumptions we stated in the last question. What is the new required minimum potential return bond buyers will demand to buy bonds under these conditions, taking into account firm risk? Carefully follow all numeric instructions. Question 6 2.5 pts Continuing with the information about Columbia: Select the firm(s) that will issue bonds in Stage Two, where conditions are as listed above. You must select all applicable firms (if there's more than one) to get the points for this question. Heckle Jackle Ickle No firms will issue bonds. > Question 7 2.5 pts This is the last question about Columbia. At the end of Stage Two, will market failure have occurred? Why or why not? Yes, because no firms will issue bonds. No, because no firms will issue bonds. Yes, because at least one firm still issues a bond. No, because at least one firm still issues a bond
