PACh10-13 - monitor SLs and SLs had moral hazard incentives...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 520 (Spring 2007) Answers to Problems for Chapters 10-13 Masao Ogaki CHAPTER 10 2. Short Answer/Essay Problems (1) Since banks are smaller with branching regulations, economies of scale are not exploited. Transactions and information costs are not reduced as much as larger banks would be able to. Branching regulations lead to less competition because it is an empirical evidence that branching regulations are causing banks to diversify less. CHAPTER 11 2. Short Answer/Essay Problems (1) Because of deposit insurance provided by the FSLIC, depositors did not
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: monitor SLs and SLs had moral hazard incentives to invest in risky assets. (2) False. Because depositors are insured, they do not monitor their banks closely and they do not withdraw deposits when their banks take on great risks. This gives banks more incentives to take on risks. CHAPTER 12 1. Multiple Choice Problems 1-C; 2-B; 3-D CHAPTER 13 1. Multiple Choice Problems 1-B;2-B; 3-A; 4-B; 5-A; 6-D 1 2. Short Answer/Essay Problems (1) On March 1, 1991, you can borrow $400 and buy one ounce of gold for $400 in the spot market and sell the gold in the futures market for March 1, 1992 delivery. On March 1, 1992, you deliver the gold and receive $480 and pays back $400 that you borrowed with $40 interest. 2...
View Full Document

This note was uploaded on 07/17/2008 for the course ECON 520 taught by Professor Ogaki during the Spring '07 term at Ohio State.

Page1 / 2

PACh10-13 - monitor SLs and SLs had moral hazard incentives...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online