Describe moral hazard and explain its reference to Central banks. a. How have moral hazards contributed to a financial crisis? Provide examples  b. Does Central Bank make moral hazards and what are the benefits?

Q: the were notified of the changes 37. A building owned by A. is sold for cash to B. Two days after…

A: Insurance is a contract in which an individual or entity receives financial protection or…

Q: systemic risk inhere mainly in the largest financial institution. true or false

A: systemic risk inhere mainly in the largest financial institution - False

Q: 27. Which of the following best describes why insider trading is said to be unethical?a. The theft…

A: a. The theft of information gives the insider an unfair advantage in the organization and the…

Q: Which of the following is true for limit orders?   a. They face adverse selection risk from noise…

A: In a market limit orders refers to the situation when brokers ar wallowed to exchange stocks and…

Q: Define and explain the importance of "Liability Dollarization"

A: The nations around the globe are involved in various economic, and financial activities. The nations…

Q: Why do bank runs occur   a. Asymmetric Information   b. Moral Hazard   c. Financial dis-imediation…

A: The objective of the question is to understand the reasons behind the occurrence of bank runs.

Q: Some of the disadvantages associated with the advent of technology include: Question 15Answer a.…

A: The correct answer to the question about disadvantages associated with the advent of technology…

Q: As the economy aggregate output fluctuates and maybe the economy enters a recession, the type of…

A: Output in the economy During a given period, the output is the number of products and services…

Q: n general, commercial banks receive their higher interest rates from   Group of answer choices a.…

A: Commercial banks pays small interest to savings accounts and generate larger or higher spread of…

Q: Explain what the effects to the FINANCIAL MARKET happen more and more people keep increasing default…

A: The majority of the people cannot repay their loans to financial institutions. There are cases of…

Q: The bond rating agencies(choose right answer) a:used outdated computer modeling software and…

A: When talking about bonds rating agencies, these are the institution that make analysis of different…

Q: 1. The structure of financial markets is influenced by the problems relating to asymmetric…

A: Asymmetric information refers to a situation in which one party has more information than the other…

Q: Explain the concepts of micro-prudential regulation and macro-prudential regulation with examples.…

A: Soundness regulation is a type of financial oversight that imposes capital, liquidity, concentration…

Q: During financial/banking crises, central banks typically act as lenders of last resort to stabilize…

A: A lender of last resort (LoR) is an organization, often a nation's central bank, that provides loans…

Q: 1. Statement I. In the Philippines, financial intermediaries are restricted in what they are allowed…

A: Financial intermediaries play the role of a moderator between two people who perform financial…

Q: Which of the following IS NOT a task the Federal Reserve undertakes? a. Stabilizing financial…

A: Federal Reserve is the central bank of the U.S. hence, it takes all the responsibilities regarding…

Q: A. True or False: Write T if the statement is correct. If it is not, write F, and state your reason…

A: Financial planning is making a forecast on the financial operation of the business.True: Financial…

Q: Q1. Insurance works by spreading risk over -   a. the uninsured   b. a few people   c. several…

A: Note:- Since we can only answer up to three subparts, we'll answer first three. Please repost the…

Q: Which of the following is true of risk premium? a. The speculative corporate issues have a lower…

A: Risk premium is the excess return a firm or corporate provides when the investment is risky. Higher…

Q: Table 10-1 First Bank of Dawson City Assets: Reserves Loans $15.00 $85.00 Liabilities: Deposits…

A: Banking is an industry that encompasses services related to the management, safeguarding, and…

Q: How does the concept of asymmetric information helpto define a financial crisis?

A: Asymmetric information refers to the situation in which the borrowers have better information about…

Q: Why does "adverse selection" exists in the case when a bank makes loans to individuals? Why does…

A: In economics the moral hazard and adverse selection refers to describe situations where one party is…

Q: Discuss the role of government in financial intermediation. Do you think government must be a player…

A: The primary goal of financial intermediation is to facilitate funding between savers and borrowers.…

Q: Which of the following are modern (post 2008) micro-prudential regulation functions? Choose all that…

A: 1.  Licensing: . Licensing is a process that allows financial institutions to operate legally. It…

Q: Match the situation with its corresponding risk category v The Federal Reserve increases capital…

A: 1. Market risk 2. Legal. Risk 3. Credit Risk 4. Settlement risk 5. Operational risk

Q: Citizen's insurance is thinking about increasing their retention (deductible) from $1 Billion to $2…

A: In the insurance market, ‘retention’ is the amount of threshold to be satisfied so that an insurer…

Q: Banks are more likely to play a role in financing requiring: Select one: a. Low credit risk. b. Very…

A: One of the primary function of banks is to provide loans and advances of various forms to it's…

Q: Financial institutions “hedge” to reduce: A. transactions cost B. diseconomies of scale C. risk D.…

A: Answer: Hedging is an investment done to reduce the risk associated with an investment. For…

Q: 2. The liquidity of an asset is A. the ease with which you can sell the asset. B. the speed at…

A: The economies around the globe tend to face a limit to the amount of resources which they have. This…

Q: Discuss the different types of risks at risk management?

A: Risk management is the anticipating and recognizing potential threats in the present or future to…

Q: Because financial intermediaries operate on a big scale, this relates to minimizing the costs of…

A: A firm producing output can yield increasing, decreasing or constant returns to scale.

Q: How does a general increase in uncertainty as a resultof the failure of a major financial…

A: Adverse selection refers to the problem where bad credit risks are more eager to take the loans and…

Q: An insured's home is covered for $10,000 under HO-3 Form. During a violation in France, personal…

A: Answer -

Q: What is the purpose of macro-prudential regulation? Question 17Answer a. To reduce the…

A: Explanation of correct option-  The purpose of macro-prudential regulation is to stabilize the…

Q: 1. What are 2 of the steps taken by the government to deal with financial crisis? Explain clearly.…

A: A financial crisis is any of a number of situations in which some financial assets lose a…

Q: Moral hazard problems associated with debt financing, such as issuing bonds, can be reduced but not…

A: A bond is an objective to maintain that symbolizes an investor's obligation to a lender (typically…

Q: Summarize the government policies thatreduce the likelihoodof financial crisesin emerging…

A: The financial crisis is a situation in the economy in which the price of asset decline steeply,…

Q: P Xpe 4: 4 Quantity of Greek Bonds Quantity of Canadian debt In the case of default, what would…

A: Risk premium is considered as the difference between the investment return and the return which is…

Financial Institutions and Federal Bank

The word financial institution is a kind of business organization that deals with the financial activities of a nation. These activities include accepting deposits, making payments, granting loans and advances, transferring funds, holding shares, providing credits, purchasing and selling foreign exchanges, investments in shares, futures commodities, and many more.