1. Define and explain investment decisions in the Capital Market with respect to expected returns, discounted cash flow, and classical utility theory. Give specific examples.
2. Define and explain the dialectic process with respect to money and financial innovation. Give some specific historical examples.
3. Define and explain asymmetric information its impact to adverse selection, moral hazard, conflicts of interest, the separation theorem, and how financial intermediaries play a role.
4. Define and explain the major theories of interest rate behavior.
5. Define and explain the functions of money and how it reduces transaction costs - give a numeric example of a barter economy.