What is the chief difference between debt and equity? finance? A. Debt finance is cheaper than equit
What is the chief difference between debt and equity finance?
A. Debt finance is cheaper than equity finance.
B.Debt finance involves a fixed stream of payments, equity finance involves a piece of profit streams.
C.Debt finance is a much better deal for the borrower.
D.Debt finance suggests that the lender does much better when the state of the world is one where the borrower does extremely well (as opposed to just somewhat well).
In modern day markets, what is the rationale for having deposits issued in a foreign currency?
A.There are often lower (or no) reserve requirements on such accounts.
B.Someone who consumes many goods denominated in dollars can minimize exchange rate risk by holding accounts in euros.
C.These accounts are not traceable by the home government.
D.The failure of purchasing power parity can make this very profitable.
What institution reduces the risk of bank runs in the U.S.?
A.S&Ls
B.Federal Reserve System
C.FDIC
D.Congress
