Economic Analysis Of Financial Structure Flashcards
0
Q
Us Canada structure
A
Higher proportion of issued securities
Not as high of loans
1
Q
Germany, Japan basic structure
A
High funding from loans by lenders
Small from issued securities
2
Q
2 types of asymmetric information
A
Adverse selection
Moral hazard
3
Q
Adverse selection
A
Before financial contacting (ex-ante)
Lemon problem
4
Q
Moral hazard
A
After transaction (ex-post) Principal agent problem
5
Q
Adverse selection solution
A
Private production and sales of information
Free public release of information-research pairs by the issuer
Government regulation
Large company better equipped for issuing securities
Financial intermediation
Collateral and net worth
6
Q
Moral hazard solution
A
Individual monitoring
Government regulations
Financial intermediation
Debt contracts
