HW4_MC Ques - HW4 MC & SA questions MULTIPLE CHOICE....

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HW4 MC & SA questions MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) American businesses get their external funds primarily from 1) _______ A) bank loans. B) bonds and commercial paper issues. C) other loans. D) stock issues. 2) Of the following sources of external finance for American nonfinancial businesses, the least important is 2) _______ A) bonds and commercial paper. B) loans from other financial intermediaries. C) loans from banks. D) stocks. 3) The predominant form of household debt is 3) _______ A) collateralized debt. B) consumer installment debt. C) unsecured debt. D) unrestricted debt. 4) A clause in a mortgage loan contract requiring the borrower to purchase homeowner's insurance is an example of a 4) _______ A) restrictive covenant. B) prescriptive covenant. C) proscriptive covenant. D) constraint - imposed covenant. 5) A borrower who takes out a loan usually has better information about the potential returns and risk of the investment projects he plans to undertake than does the lender. This inequality of information is called 5) _______ A) noncollateralized risk. B) asymmetric information. C) moral hazard. D) adverse selection. 6) The analysis of how asymmetric information problems affect economic behavior is called ________ theory. 6) _______ A) agency B) principal C) parallel D) uneven 7) The ________ problem helps to explain why the private production and sale of information cannot eliminate ________. 7)
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This note was uploaded on 10/17/2009 for the course EC 370 taught by Professor Staff during the Spring '08 term at University of Oregon.

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HW4_MC Ques - HW4 MC & SA questions MULTIPLE CHOICE....

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