金融市场学练习题

American businesses get their external funds primarily from

bonds and commercial paper issues.

stock issues.

bank loans.

nonbank loans.

Which of the following describes the "lemons problem?"

Sellers have more information than buyers and few transactions occur.

Buyers have more information than sellers and many transactions occur.

Buyers have more information than sellers and few transactions occur.

Sellers have more information than buyers and many transactions occur.

The concept of adverse selection helps to explain

why large, well-established corporations find it so difficult to borrow funds in securities markets.

which firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.

why collateral is not a common feature of many debt contracts.

all of the above.

The principal-agent problem arises because

(a) agents have more information about their activities than do the principals.

(b) monitoring agents' activities is costly.

(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.

The fact that only large, well-established corporations have access to securities markets

(a) explains why indirect finance is such an important source of external funds for businesses.

(b) can be explained by the problem of adverse selection.

(c) can be explained by government regulations that prohibit small firms from acquiring funds in securities markets.

(d) can be explained by all of the above.

(e) can be explained by only (a) and (b) of the above.

Poor people have difficulty getting loans because

they are less likely to benefit from access to financial markets.

they are more likely to be dishonest.

they typically have little collateral.

of all of the above.

of none of the above.

Financial intermediaries, particularly banks,

(a) are experts in the production of information about firms so that they can sort good risks from bad ones.

(b) overcome the free-rider problem by primarily making private loans, rather than

purchasing securities that are traded in the open market.

(c) play a greater role in moving funds to corporations than do securities markets.

(d) all of the above.

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

Economies of scale allow financial intermediaries to overcome problems of moral hazard.

free-riding.

high transaction costs.

adverse selection.

A clause in a debt contract requiring the borrower to purchase insurance against loss of the asset financed with the loan is called a

collateral-insurance clause.

restrictive covenant.

proscriptive covenant.

prescriptive covenant.

If a financial crisis is thought of as a sequence of events, which of the following events would be least likely to be the initiating cause of the financial crisis?

unanticipated decline in price level

stock market decline

increase in interest rates

increase in uncertainty

Most financial crises in the United States have begun with

(a) a steep stock market decline.

(b) an increase in uncertainty resulting from the failure of a major firm.

(c) a steep decline in interest rates.

(d) all of the above.

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

Governments in developing countries sometimes adopt policies that retard the efficient operation of their financial systems. These actions include policies that

(a) prevent lenders from foreclosing on borrowers with political clout.

(b) nationalize banks and direct credit to politically-favored borrowers.

(c) make it costly to collect payments and collateral from defaulting debtors.

(d) do all of the above.

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

______ causes a financial crisis to move into the debt-deflation phase.

Increase in interest rates

Stock market decline

Unanticipated decline in the price level

Increase in uncertainty

Which of the following are reported as assets on a bank's balance sheet?

(a) bank capital