What is adverse selection?  Why does it predict that lenders will prefer to arrange loans through a commercial bank rather than deal directly with a borrower

Q: Why some entrepreneurs are hesitant to avail of commercial bank loans? (b) Why some of them resort…

A: To start a business, some amount of capital is needed beyond the owner's capital. Commercial…

Q: Which one of the following statements regarding the loans market is false? a) The principal-agent…

A: Please see the next step for the Answer

Q: what is ADVANTAGES AND DISADVANTAGES OF THIS MORATORIUM  in banking to  BANKS . Give an example

A: MORATORIUM- is an option available to borrower to defer the EMI payment. During the moratorium…

Q: What are the possible arguments for setting up a firewall between investment banks and commercial…

A: At the time, improper banking activity–the overzealous commercial bank involvement in stock market…

Q: Credit markets are driving long-term changes in banks. Forces that combined to lead to a…

A: Cost of credit depends on quality of credit provided.

Q: Why might customers of big banks be reluctant to moveto a credit union?

A: Introduction: A credit union is a financial mutual institution which is owned and operated for its…

Q: Ways that banks compete for customers

A: Introduction: Banking is a highly competitive sector with virtually similar goods offered by all…

Q: If Steve can't decide what bank to take a loan from, what banking service would make a bank a better…

A: 0% Financing represents the discounted finance or loan that is provided to the customers at a…

Q: Which of the following is not a reason for banks to be regulated? a.To protect depositors. b.To…

A: A bank is a type of financial institution that handles all procedures linked to depositing and…

Q: What are the pros and cons of U.S. savings bonds?

A: We are allowed to answer one question at a time. Since you have not mentioned which answer you are…

Q: what is ADVANTAGES AND DISADVANTAGES OF THIS MORATORIUM FOR THE BANKS AND BORROWERS? provide…

A: A moratorium is a temporary cessation of activity until future circumstances necessitate its lifting…

Q: How can bankers be spotting potential fraud among the loan granted

A: Bank loan means the loan given by the bank to the borrower. This loan can be provided for short term…

Q: Which of the following roles is considered a main objective of credit rating agencies? a. Granting…

A: A credit rating agency examines a debtor's ability to repay the debt by making timely principal and…

Q: Why do you think banks are willing to offer savers higher rates of return if they agree to less…

A: Savers are those persons who deposit money in various deposit accounts for the purpose of earning…

Q: why do banks consider interest on loans to be important?

A: Bank is defined as the financial institution, which accepts the deposits from public as well as…

Q: hich of the following is not a way in which banks lend short-term unsecured loans? a. Through a…

A: Banks give short term credits to the business to increase the business and grow business and provide…

Q: Describe moral hazard in the context of information asymmetries and how it can lead to lower levels…

A: A bank is a type of financial institution that takes deposits and lends money. Wealth management,…

Q: Why are some entrepreneurs hesitant to avail of commercial bank loans? Why do some of them resort to…

A: Commercial bank is a type of bank which accepts deposits from public and advance deposits to public…

Q: 1. if a small bank lends to a customer who wants a mortgage that is too large for the small bank to…

A: A loan is a financial transaction in which one or more individuals, organisations, or other entities…

Q: Explain why some financial institutions prefer to provide credit in financial markets outside their…

A: Financial institutions are organizations which deal with financial and monetary transactions. Banks,…

Q: How does the cost of costly trade credit generally compare withthe cost of short-term bank loans?

A: Costly trade credit imply companies that make payments after the discount period as they forego the…

Q: Doubtful debts are those debts which is unlikely to be able to collect, bank hiring a collection…

A: Bad debts are those debts that are yet to be collected. Third parties who collect the debt are…

Q: Could efforts to avoid conflicts of interest lead an investment bank to provide poor service to a…

A: An investment is a financial institution that provides services to the company. Mainly, the clients…

Q: What bank regulations are designed to reduce moral hazard problems created by deposit insurance?…

A: Bank regulation is defined as the government regulation form that is subjected to requirements,…

Q: Why will bank never opt for the rejection of payment of LC to exporters bank?

A: A Letter of Credit or Credit Letter refers to a assurance letter given by the bank to its buyer that…

Q: Why are credit rating agencies reliable/unreliable?

A: Credit Rating agencies are unreliable because of the following reasons: 1-Ideological biases: In…

Q: Banks may deny creditworthy borrowers loan requests if a. they are non-corporate entities b. they…

A: Loan is the money that an entity or an individual can borrow or raise from a bank or any other…

Q: How does peer to peer lending is different from traditional banking lending for Credit Mutuel Group?

A: Peer-to-peer lending is a type of crowd-funding that allows those who wish to invest to lend money…

Q: heir loans in one industry so that they can specialize on that industry and reduce the credit risk…

A: Credit risk means risk of default in payment obligation by borrower.

Q: Depositing money into a commercial bank is investing in a

A: Step1: Commercial banks form part of an organized money market. Commercial banks deals in money and…

Q: A bank that grants loans to firms in a many different lines of business:  will increase its…

A: When a bank grants loans to firms in different lines of business then it has to incur more expenses…

Q: What are the major flaws with NPV? What are the major flaws with IRR? If you are going to a bank and…

A: Major flaws with NPV:Requires an assumption of discount rate which is not directly observable in the…

Q: An advantage financial institutions have over individual household investors is that they are able…

A: Investors have different options to make investments, and the motive behind investments is to…

Q: shadow banking and how does it differ from traditional retail banking? What kind  of threat does…

A: Shadow Banking: Shadow banking refers to bank-like activities that occur outside of the formal or…

Q: What is credit risk? Discuss the more qualitative factors that creditors also consider in…

A: Financial Risks can be of various types such as market rate risk, credit risk, interest rate risk,…

Q: How banks safeguard the deposits of customers from financial losses?

A: The banks safeguard the deposits of customers with the help of an independent agency.

Q: Why banks are subject to intense regulations? Explain the circumstances where banks are sometimes…

A: Bank regulation is a form of government regulations which subjects banks to certain requirements,…

Q: How does a lower credit rating affect borrowers lenders and financial institution? What are the…

A: The credit rating is a measurement of the creditworthiness of the borrower. In the capital market,…

Q: To minimize systemic risk in the banking system, which prudential measure has been put in place in…

A: A breach of this fiduciary responsibility might result in the misbehaving bank being held…

Q: Explain market risk and discuss why banks are subject to this risk. Discuss how banks manage this…

A: If an investor invests money in a market there are different types of risk which an investor is…

Q: Commercial banks are often restricted by Central banks to hold sufficient capital. Why is such a…

A: A commercial bank may be a financial institution that accepts deposits, provides bank account…