money and banking
bn.lth
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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