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: Regulations that reduced competition between banks included branching restrictions. bank reserve…

A: In the banking sector, siem regulations are imposed on the banks to maintain the effectiveness of…

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: The term de-risking is best described as: a. Removing risk from the banking sector. b. The process…

A: The institution that accepts deposits from the general public and grants loans to businesses is…

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: This type of risk can be exacerbated by financial pressure, economic downturns, and possibility of…

A: There are several types of risks that the businesses have to face in their life. These can be 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: What are the interlinkages between financial crisis and financial system of a country?

A: The financial system assumes a key part in encouraging economic development by productively…

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: state O1 lad an eXtra 00 III tax ue In tne last year. The Governor and the Speaker of the State…

A: In above game there are two players included in the bargaining game . Tax amount to be split between…

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: help please answer in text form with proper workings and explanation for each and every part and…

A: Consider the given,P=$200Rate of interest =6% per year=6% /2 = 3% per periodNumber of periods = 20…

Q: Select a case of weak regulatory framework within a financial institution which resulted in the…

A: The destruction of Lehman Family in 2008, the fourth-most critical speculation bank in the USA by…

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, and show the change in the diagram below, how the increase in net investment will affect…

A: Production possibility curve shows the combination of two goods that can be produced with the given…

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: 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: The government. can provide investors with the necessary information to assess the capacity of a…

A: Government financial statement includes information on government revenue, expenses, assets,…

Q: RISKS'R'US Insurance Company, who Brenda has her home insured with, became insolvent the same day…

A: When insurance companies go bankrupt, then in such cases, the state guaranty association and…

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: 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: medium of exchange unless it also serves as a store of value. Is this statement t

A: The money is used as the medium of exchange and store of value. Money is used as unit of account as…

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…

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.