Risk sharing is profitable for financial institutions due to
A) low transactions costs.
B) asymmetric information.
C) adverse selection.
D) moral hazard.
A
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What is the relationship between gross investment, net investment, and depreciation? Which measures the change in the capital stock?
What will be an ideal response?
Limit pricing occurs when a firm sets price _________________.
On a production possibilities frontier, the opportunity cost of one more unit of a commodity per time period is measured by the
a. monetary price of the commodity b. amount of the other commodity that must be sacrificed c. amount of unemployed resources that must be used d. amount of satisfaction it gives consumers e. amount of tax paid to government for production, sale, and use of the commodity
If a country's current account balance is zero and the financial payments flowing in and out of the country's economy are equal, then which of the following must be a true statement?
a. It has an overall or net inflow of financial investment. b. It is not an overall or a net investor in other countries. c. It has an overall or net outflow of financial investment. d. Its government is not indebted to other governments.