Please anser multiple choice questions 7-12.

Question 7.7. The result of the "too-big-to-fail" policy is that big banks will take on __________ risks, making failures ___________ likely. (Points : 3)

a. fewer; less b.greater; less c.fewer; more d.greater; more

Question 8.8. The possibility that a borrower may engage in more risky behavior after a loan has been made best describes an example of: (Points : 3)

a.the principal-agent problem b.securitization c.adverse selection d.moral hazard e.none of the above

Question 9.9. The largest single earning asset of commercial banks in the U.S. is: (Points : 3)

a.cash b.Treasury securities c.deposits d.loans e.commercial paper

Question 10.10. The primary source of bank funds today is: (Points : 3)

a.loans b.borrowings c.checkable deposits d.nontransaction deposits

Question 11.11. "Bank activities that involve trading financial instruments and the generation of income from fees-all of which affect bank profits" most likely describes: (Points : 3)

a.collateralization b.financial intermediation c.moral hazard d.off-balance-sheet activities e.market segmentation

Question 12.12. Prior to the current "financial crisis" and financial markets problem period, the most recent one during which there were significant (100 or more in a single year) numbers of bank failures and that posed the threat of "systemic risk" for the economy was (roughly relative to dates): (Points : 3)

a. 1929 - 1934 b.1964 - 1973 c.1984 - 1994 d.1996 - 2001