The principal and interest What is the true definition of Compound interest? Main part amount you are borrowing

Municipal bonds - bonds issued by state and local governments

What is the difference between direct finance and indirect finance in terms of flow of funds?

In direct finance savers-investors, in indirect Savers-bank-investors
Find the true definition of Adverse selection:

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  Adverse selection occurs when either the buyer or seller has more information about the product or service than the other. In other words, the buyer or seller knows that the products value is lower than its worth.
  
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  Adverse selection occurs when one party has more information on the good than the other.
  
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  As one party has more information than the other, they are able to charge a higher price than if the other party had the same information. This leads to adverse selection.
  
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What is Moral Hazard?

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  The most serious drawback of the government safety net stems from moral hazard :
  

“ the incentives of one party in a transaction to engage in activities detrimental to the other party.”

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  Moral hazard is an important concern in insurance arrangements in general because the existence of insurance provides increased incentives for taking risks that might result in an insurance payoff.
  

What Is the Moral Hazard Problem in Banking?

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  The moral hazard problem in banking is the idea that certain corporations, such as banks and automakers, are too big to fail. These companies usually take risks to become more profitable because they know the government will bail them out in the future.
  

Indicate the correct explanation of Principal-agent problem:

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  The principal-agent problem is a conflict in priorities between the owner of an asset and the person to whom control of the asset has been delegated.
  

Indicate the incorrect method to reduce Information Asymmetries

What is the Free-rider problem in financial system?

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