How can improvements in statistical analysis of financial data cause the amount of information in financial markets to decline?
What will be an ideal response?
Statistical analysis is a process of drawing inferences from (preferably) large sets of data. When it is possible to predict outcomes such as the overall default rate within a pool of loans, constructing such pools is cheaper and more profitable than attempting to analyze and manage each loan individually. Quantitative scores and rough categorizations replace detailed and largely qualitative "dossier" for each borrower. Since ownership of the loan assets is both aggregated and dispersed, no one has incentive nor ability to monitor the behavior of borrowers. Lenders receive less information about borrowers, and less information about their fellow lenders.
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The relationship between two variables, x and y, is a vertical line. Thus x and y are
A) positively correlated. B) negatively correlated. C) not related. D) falsely related.
Explain what Eurocurrencies are and why they are significant
What will be an ideal response?
Wall Street bankers opposed the Second Bank of the United States. Their opposition was based on the idea that the Second Bank
a. lent too freely to the federal government. b. followed a monetary policy that favored stable prices even at the cost of a slower growing economy. c. followed a monetary policy that kept interest rates too high. d. favored Philadelphia because that was where the head office of the bank was located.
An increase in the cost of training to acquire a skill, which must be paid by the worker,
a. increases both the supply of and demand for labor in that market b. decreases both the supply of and demand for labor in that market c. increases the supply of labor and decreases the demand for labor in that market d. decreases the supply of labor and increases the demand for labor in that market e. decreases the supply of labor only in that market