1. Which of the following is not considered an example of a financial intermediary?
commercial banks
the Federal Reserve
mutual funds
insurance companies
saving and loan associations
2. When the least desirable credit risks are the ones most likely to seek loans, lenders are subject to the:
moral hazard problem
adverse selection problem
prisoner's dilemma
perverse incentives problem
3. The most important asset underlying the financial system is:
money
stocks
bonds
income
home mortgages
4. That very sensitive short-term interest rate that applies to overnight borrowing of excess reserves between banks-and that is closely watched as a barometer of money market conditions is:
the discount rate
the commercial paper rate
the federal funds rate
the prime rate