Question 5 Commercial papers are financial instruments initially sold by a). commercial banks b). the government c). large corporations d). investment banks e). thrifts Question 6 Adverse selection is a problem associated with equity and debt contracts arising from a). the lender's relative lack of information about the borrower's potential returns and risks of his investment activities b). the lender's inability to legally require sufficient collateral to cover a 100% loss if the borrower defaults c). the borrower's lack of incentive to seek a loan for highly risky investments d) the borrower's lack of good options for obtaining funds e). all of the above are adverse selection issues