The Risk That the Collapse of One Bank Will Lead

question 40

Multiple Choice

The risk that the collapse of one bank will lead to the collapse of other banks is known as _____.

• A) contagion
• B) a thematic risk
• C) a liquidity risk
• D) an endemic risk

Understand the basic concept of asymmetric information and its impact on market transactions.

Recognize adverse selection and moral hazard problems in various markets.

Identify mechanisms like market signaling and government intervention to mitigate asymmetric information issues.

Relate the concepts of risk aversion, risk neutrality, and risk-loving to decision-making under uncertainty.

---

Definitions:

Dyscalculia

Unusual difficulty with math, probably originating from a distinct part of the brain.

Attention-Deficit/Hyperactivity Disorder

A neurodevelopmental disorder characterized by patterns of inattention, hyperactivity, and impulsivity that are more severe than typically observed in individuals at a comparable level of development.

Attention-Deficit/Hyperactivity Disorder

A neurodevelopmental disorder characterized by a pattern of inattention and/or hyperactivity-impulsivity that interferes with functioning or development.

Childhood Schizophrenia

A rare and severe form of schizophrenia that manifests in children, characterized by hallucinations, delusions, and cognitive difficulties.