Chapter 1
7. What is the current slope of the Treasury yield curve, flat, upward sloping, or downward sloping? (Country USA)
Chapter 2
8. What is moral hazard? How does it relate to asymmetric information? How does adverse selection relate to asymmetric information?
12. Explain the relationships among corporate shareholders, boards of directors, and managers? Why has such a system of governance proven to be essential for efficiency?
Chapter 3
2. What distinguishes cash and securities on a bank's balance sheet from loans? Retail deposits from wholesale deposits?
13. How does maturity transformation pose risks for commercial banks? Does it make any difference whether the bank's assets have longer or shorter maturities than its liabilities? Is one more risky than the other?