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the principal-agent problem securitization adverse selection moral hazard none o

ID: 2598273 • Letter: T

Question

       the principal-agent problem
       securitization
       adverse selection
       moral hazard
       none of the above

       1929 - 1934
       1964 - 1973
       1984 - 1994
       1996 - 2001

       It raised the amount of insurance coverage from $40,000 per account to $100,000
       It attempted to curtail use of the "Too big to fail" policy by the FDIC
       It mandated that the FDIC design and implement a system of risk-based deposit insurance premiums
       It established new a capital adequacy classification system for banks
       All the above-since it did none of the things listed above

6. The possibility that a borrower may engage in more risky behavior after a loan has been made best describes an example of: (Points : 3)

Explanation / Answer

6 c) It is known as moral hazard where borrower can do something which can increase the risk to lender.

7 c) 1984-1994

8 a) It did not raise insurance coverage.