QUESTION 7 Financial crises , are major disruptions in financial markets that are characterized by sharp declines in asset prices and the failures of many financial and non-financial firms. occur when adverse selection and moral hazard problems in financial markets become more significant. OC frequently lead to sharp contractions in economic activity are all of the above. E are only A and B of the above B. QUESTIONS means the investors can convert their investment into cash quickly at a low w cost. A Denomination intermediation Diversification Liquidity intermediation D. Managerial expertise B