money and banking

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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?

    • 9 years ago
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