HW_9_Questions_Chapter_15_17[1]

HW_9_Questions_Chapter_15_17[1] - HW 7 Chapters 15 and 17...

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Chapter 15 Answers to End-of-Chapter Questions 7-10 Chapter 15 Quantitative problems Questions 1 Chapter 17 Answers to End-of-Chapter Questions 4, 10, 14, 15 Chapter 17 Quantitative problems Questions 2, 5, 7-8 Multiple Choice 1. The concept of adverse selection helps to explain which firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets. why large, well-established corporations find it so difficult to borrow funds in securities markets. why collateral is not a common feature of many debt contracts. all of the above. 2. The principal-agent problem arises because (a) agents have more information about their activities than do the principals. (b) monitoring agents' activities is costly. (c) principals have incentives to free-ride off the monitoring expenditures of other principals. (d) of all of the above. (e) of only (a) and (b) of the above.
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This note was uploaded on 09/07/2011 for the course FIN 353 taught by Professor Cobus during the Spring '08 term at S.F. State.

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HW_9_Questions_Chapter_15_17[1] - HW 7 Chapters 15 and 17...

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