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Note: Remember to write in your answer IN YOUR OWN WORDS. Copy/paste from any source, including your peers in the class that is identifiable by SIMILAR narrative, will earn zero mark and may lead to some additional penalty. In answering the questions, for better marks, incorporate ideas/concepts you have learnt in chapters 1 and 2 01. Explain the role of the financial system and its importance to the economy as a whole as well as to individuals. [2] Q2. Discuss the key differences between money and capital markets and the differentiated role they play as part of the financial system. [2 marks] Q3: What is information asymmetry? How financial markets and institutions are affected by such asymmetry, explain with specific examples.[6 marks] 04. What is moral hazard and how it relates to the problem of adverse selection