Because of the Weak Systems of Property Rights in Many

question 11

Multiple Choice

Because of the weak systems of property rights in many developing and transition economies,the financial system is unable to use collateral effectively worsening the ________ problem.

• A)adverse selection
• B)moral hazard
• C)principal/agent
• D)diversification

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Definitions:

Equity-Financed

Refers to the method of funding a company's operations, expansion, or projects using the capital raised through the sale of equity, rather than using debt.

Total Earnings

The sum of all income and revenue generated by a business or individual within a specific period.

Shares Outstanding

Refers to all shares currently owned by shareholders, company insiders, and investors in the public domain, representing ownership in a company.

Market Price

The present cost at which an asset or service is offered for buying or selling in the market.