One Financial Intermediary in Our Financial Structure That Helps to Reduce

question 47

Multiple Choice

One financial intermediary in our financial structure that helps to reduce the moral hazard from arising from the principal-agent problem is the

• A)venture capital firm.
• B)money market mutual fund.
• C)pawn broker.
• D)savings and loan association.

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Definitions:

Holder in Due Course

A party who has acquired a negotiable instrument in good faith and for value, thus having certain protections against defenses and claims that could be raised by prior parties.

Shelter Principle

A legal concept that allows a person who receives goods in good faith without knowledge of a defect in the title to sell them with a clear title.

Holder

A party in possession of a negotiable instrument.

Bearer

An individual in possession of a negotiable instrument or security that is payable to whomever holds the document.