Discuss each of the following in a complete paragraph. 2 pages needed…doble spaced…APA format.
Thank You!
1. Explain the principal-agent problem as it pertains to equity contracts.
2. Why does the free-rider problem occur in the debt market?
3. Your bank has the following balance sheet:
Assets |
|
Reserves |
$50 million |
Securities |
$50 million |
Loans |
$150 million |
|
|
Liabilities |
|
Checkable deposits |
$200 million |
Bank capital |
$50 million |
4.
If the required reserve ratio is 10%, what actions should the bank manager take if there is an unexpected deposit outflow of $50 million?
5. How can specializing in lending help to reduce the adverse selection problem in lending?
Hi there! Click one of our representatives below and we will get back to you as soon as possible.