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© 2014 Pearson Canada Inc.#
One purpose of regulation of financial markets is to ____.
A) limit the profits of financial institutions
B) increase competition among financial institutions
C) promote the provision of information to shareholders, depositors and the public
D) guarantee that the maximum rates of interest are paid on deposits
Answer: C
Diff: 2 Type: MC Page Ref: 162
Skill: Recall
Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
hazard
Property that is pledged to the lender in the event that a borrower cannot make his or her debt
payment is called ____.
A) collateral
B) points
C) interest
D) good faith money
Answer: A
Diff: 1 Type: MC Page Ref: 163
Skill: Recall
Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
hazard
Collateralized debt is also know as ____.
A) unsecured debt
B) secured debt
C) unrestricted debt
D) promissory debt
Answer: B
Diff: 1 Type: MC Page Ref: 163
Skill: Recall
Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
hazard
Credit card debt is ____.
A) secured debt
B) unsecured debt
C) restricted debt
D) unrestricted debt
Answer: B
Diff: 1 Type: MC Page Ref: 163
Skill: Recall
Objective List: 8.1 Depict how asymmetric information results in adverse selection and moral
hazard