金融市场与机构15.docx

金融市场与机构15.docx

《金融市场与机构15.docx》由会员分享，可在线阅读，更多相关《金融市场与机构15.docx（30页珍藏版）》请在冰豆网上搜索。

金融市场与机构15

1Chapter15

WhyDoFinancialInstitutionsExist?

1n MultipleChoiceQuestions

1.OfthefollowingsourcesofexternalfinanceforAmericannonfinancialbusinesses,theleastimportantis

（a）loansfrombanks.

（b）stocks.

（c）bondsandcommercialpaper.

（d）nonbankloans.

Answer:

B

2.OfthefollowingsourcesofexternalfinanceforAmericannonfinancialbusinesses,themostimportantis

（a）loansfrombanks.

（b）stocks.

（c）bondsandcommercialpaper.

（d）nonbankloans.

Answer:

D

3.OfthesourcesofexternalfundsfornonfinancialbusinessesintheUnitedStates,bondsaccountforapproximately_________ofthetotal.

（a）10percent

（b）20percent

（c）30percent

（d）50percent

Answer:

C

4.OfthesourcesofexternalfundsfornonfinancialbusinessesintheUnitedStates,stocksaccountforapproximately_________ofthetotal.

（a）10percent

（b）20percent

（c）30percent

（d）40percent

Answer:

A

5.WithregardtoexternalsourcesoffinancingfornonfinancialbusinessesintheUnitedStates,whichofthefollowingareaccuratestatements?

（a）MarketablesecuritiesaccountforalargershareofexternalbusinessfinancingintheUnitedStatesthaninmostothercountries.

（b）Since1970,lessthan5percentofnewlyissuedcorporatebondsandcommercialpaperhavebeensolddirectlytoAmericanhouseholds.

（c）ThestockmarketaccountedforthelargestshareofthefinancingofAmericanbusinessesinthe1970–2000period.

（d）Alloftheabove.

（e）Only（a）and（b）oftheabove.

Answer:

E

6.WithregardtoexternalsourcesoffinancingfornonfinancialbusinessesintheUnitedStates,whichofthefollowingareaccuratestatements?

（a）Directfinanceisusedinlessthan5percentoftheexternalfinancingofAmericanbusinesses.

（b）Onlylarge,well-establishedcorporationshaveaccesstosecuritiesmarketstofinancetheiractivities.

（c）LoansfrombanksandotherfinancialintermediariesintheUnitedStatesprovidefivetimesmorefinancingofcorporateactivitiesthandostockmarkets.

（d）Alloftheabove.

（e）Only（a）and（b）oftheabove.

Answer:

D

7.（I）IntheUnitedStatesnonbankloansarethemostimportantsourceofexternalfundsfornonfinancialbusinesses.（II）InGermanyandJapan,issuingstocksandbondsisthemostimportantsourceofexternalfornonfinancialbusinesses.

（a）（I）istrue,（II）false.

（b）（I）isfalse,（II）true.

（c）Botharetrue.

（d）Botharefalse.

Answer:

A

8.Whichofthefollowingisnotoneoftheeightbasicfactsaboutfinancialstructure?

（a）Debtcontractsaretypicallyextremelycomplicatedlegaldocumentsthatplacesubstantialrestrictionsonthebehavioroftheborrower.

（b）Indirectfinance,whichinvolvestheactivitiesoffinancialintermediaries,ismanytimesmoreimportantthandirectfinance,inwhichbusinessesraisefundsdirectlyfromlendersinfinancialmarkets.

（c）Collateralisaprevalentfeatureofdebtcontractsforbothhouseholdsandbusiness.

（d）Newsecurityissuesarethemostimportantsourceofexternalfundstofinancebusinesses.

Answer:

D

9.Whichofthefollowingisnotoneoftheeightbasicfactsaboutfinancialstructure?

（a）Thefinancialsystemisamongthemostheavilyregulatedsectorsoftheeconomy.

（b）Issuingmarketablesecuritiesistheprimarywaybusinessesfinancetheiroperations.

（c）Indirectfinance,whichinvolvestheactivitiesoffinancialintermediaries,ismanytimesmoreimportantthandirectfinance,inwhichbusinessesraisefundsdirectlyfromlendersinfinancialmarkets.

（d）Financialintermediariesarethemostimportantsourceofexternalfundstofinancebusinesses.

Answer:

B

10.Becauseinformationisscarce,

（a）equitycontractsareusedmuchmorefrequentlytoraisecapitalthanaredebtcontracts.

（b）monitoringmanagersgivesrisetocostlystateverification.

（c）governmentregulations,suchasstandardaccountingprinciples,canhelpreducemoralhazard.

（d）alloftheabovearetrue.

（e）only（b）and（c）oftheabovearetrue.

Answer:

E

11.Whichofthefollowingbestexplainstherecentdeclineintheroleoffinancialintermediaries?

（a）Privateproductionandsaleofinformation

（b）Governmentregulationtoincreaseinformation

（c）Improvementsininformationtechnology

（d）Noneoftheabovecanexplaintherecentdecline

Answer:

C

12.（I）Thetotalcostofcarryingoutatransactioninfinancialmarketsincreasesproportionallywiththesizeofthetransaction.（II）Financialintermediariesfacilitatediversificationwhenaninvestorhasonlyasmallsumtoinvest.

（a）（I）istrue;（II）isfalse

（b）（I）isfalse;（II）istrue

（c）Both（I）and（II）aretrue

（d）Both（I）and（II）arefalse

Answer:

B

13.Ifbadcreditrisksaretheoneswhomostactivelyseekloansand,therefore,receivethemfromfinancialintermediaries,thenfinancialintermediariesfacetheproblemof

（a）moralhazard.

（b）adverseselection.

（c）free-riding.

（d）costlystateverification.

Answer:

B

14.Ifborrowerstakeonbigrisksafterobtainingaloan,thenlendersfacetheproblemof

（a）free-riding.

（b）adverseselection.

（c）moralhazard.

（d）costlystateverification.

Answer:

C

15.Becauseofthelemonsproblemintheusedcarmarket,theaveragequalityoftheusedcarsofferedforsalewillbe_________,whichgivesrisetotheproblemof_________.

（a）low;moralhazard

（b）low;adverseselection

（c）high;moralhazard

（d）high;adverseselection

Answer:

B

16.Intheusedcarmarket,asymmetricinformationleadstothelemonsproblembecausethepricethatbuyersarewillingtopaywill

（a）reflectthehighestqualityofusedcarsinthemarket.

（b）reflectthelowestqualityofusedcarsinthemarket.

（c）reflecttheaveragequalityofusedcarsinthemarket.

（d）noneoftheabove.

Answer:

C

17.Theproblemcreatedbyasymmetricinformationbeforethetransactionoccursiscalled_________,whiletheproblemcreatedafterthetransactionoccursiscalled_________

（a）adverseselection;moralhazard.

（b）moralhazard;adverseselection.

（c）costlystateverification;free-riding.

（d）free-riding;costlystateverification.

Answer:

A

18.Aborrowerwhotakesoutaloanusuallyhasbetterinformationaboutthepotentialreturnsandriskoftheinvestmentprojectsheplanstoundertakethandoesthelender.Thisinequalityofinformationiscalled

（a）moralhazard.

（b）asymmetricinformation.

（c）noncollateralizedrisk.

（d）adverseselection.

Answer:

B

19.Adverseselectionisaproblemassociatedwithequityanddebtcontractsarisingfrom

（a）thelender’srelativelackofinformationabouttheborrower’spotentialreturnsandrisksofhisinvestmentactivities.

（b）thelender’sinabilitytolegallyrequiresufficientcollateraltocovera100percentlossiftheborrowerdefaults.

（c）theborrower’slackofincentivetoseekaloanforhighlyriskyinvestments.

（d）noneoftheabove.

Answer:

A

20.Moralhazardisaproblemassociatedwithdebtandequitycontractsarisingfrom

（a）theborrower’sincentivetoundertakehighlyriskyinvestments.

（b）theowners’inabilitytoensurethatmanagerswillactintheowners’interest.

（c）thedifficultylendershaveinsortingoutgoodcreditrisksfrombadcreditrisks.

（d）alloftheabove.

（e）only（a）and（b）oftheabove.

Answer:

E

21.Becauseoftheadverseselectionproblem,

（a）lendersmaymakeadisproportionateamountofloanstobadcreditrisks.

（b）lendersmayrefuseloanstoindividualswithlownetworth.

（c）lendersarereluctanttomakeloansthatarenotsecuredbycollateral.

（d）alloftheabove.

Answer:

D

22.Becauseoftheadverseselectionproblem,

（a）goodcreditrisksaremorelikelytoseekloans,causinglenderstomakeadisproportionateamountofloanstogoodcreditrisks.

（b）lendersmayrefuseloanstoindividualswithhighnetworth,becauseoftheirgreaterproclivityto“skiptown.”

（c）lendersarereluctanttomakeloansthatarenotsecuredbycollateral.

（d）alloftheabove.

Answer:

C

23.Theproblemofadverseselectionhelpstoexplain

（a）whybanksprefertomakeloanssecuredbycollateral.

（b）whybankshaveacomparativeadvantageinraisingfundsforAmericanbusinesses.

（c）whyborrowersarewillingtooffercollateraltosecuretheirpromisestorepayloans.

（d）alloftheabove.

（e）only（a）and（b）oftheabove.

Answer:

D

24.Theproblemofadverseselectionhelpstoexplain

（a）whichfirmsaremorelikelytoobtainfundsfrombanksandotherfinancialintermediaries,ratherthanfromsecuritiesmarkets.

（b）whycollateralisanimportantfeatureofconsumer,butnotbusiness,debtcontracts.

（c）whydirectfinanceismoreimportantthanindirectfinanceasasourceofbusinessfinance.

（d）only（a）and（b）oftheabove.

Answer:

A

25.Theconceptofadverseselectionhelpstoexplain

（a）whycollateralisnotacommonfeatureofmanydebtcontracts.

（b）whylarge,well-establishedcorporationsfinditsodifficulttoborrowfundsinsecuritiesmarkets.

（c）whyfinancialmarketsareamongthemostheavilyregulatedsectorsoftheeconomy.

（d）alloftheabove.

Answer:

C

26.Thatmostusedcarsaresoldbyintermediaries（i.e.,usedcardealers）providesevidencethattheseintermediaries

（a）havebeenaffordedspecialgovernmenttreatment,sinceusedcardealersdonotprovideinformationthatisvaluedbyconsumersofusedcars.

（b）areabletopreventpotentialcompetitorsfromfree-ridingofftheinformationthattheyprovide.

（c）havefailedtosolveadverseselectionproblemsinthismarketbecause“lemons”continuetobetraded.

（d）doalloftheabove.

Answer:

B

27.Thatmostusedcarsaresoldbyintermediaries（i.e.,usedcardealers）providesevidencethattheseintermediaries

（a）provideinformationthatisvaluedbyconsum