When the least desirable credit risks are the ones most likely to seek loans, lenders are subject to the

Related MCQs

• In financial markets, lenders typically have inferior information about potential returns and risks associated with any investment project. This difference in information is called
• When the potential borrowers who are the most likely to default are the ones most actively seeking a loan, _ is said to exist.
• Business finance companies provide specialized forms of credit to businesses by making loans and purchasing accounts receivable at a discount; this provision of credit is called
• Which of the following are functions of a financial system? 1. The operation of a payments system. 2. Providing the means of portfolio adjustment. 3. Helping to reduce unemployment. 4. Channelling funds between lenders and borrowers. 5. Helping speculators to bet on price movements.
• Which of the following actions might you expect lenders to take during periods of variable and unpredictable inflation?
• Successful financial intermediaries have higher earnings on their investments because they are better equipped than individuals to screen out good from bad risks, thereby reducing losses due to
• Retail banking means granting loans for:
• The demand for heavy loans can cause
• __________would encompass fees received by the bank, but not revenues coming from interest charges on loans.
• Which of the following sequences lists financial assets from least risky to most risky?