State whether the following statements are True or False: 1. The principal-agent problem explains why debt contracts are so much more prevalent in financial market than equity contracts. 2. Because of an expected rise in interest rates in the future, a banker will likely buy long-term rather than short-term bonds. 3. Holding large amounts of bank capital helps prevent bank failures because it can be used to absorb the losses resulting from a deposit outflow. 4. Banks hold excess and secondary reserves to reduce the interest-rate risk problem. 5. Banks seek the highest returns possible subject to minimizing risk and making adequate provisions for liquidity. 6. Banks earn profits primarily by issuing loans