Question : 8.4 The Lemons Problem: How Adverse Selection Influences Financial Structure 1) : 1373699

Economics

8.4 The Lemons Problem: How Adverse Selection Influences Financial Structure

1) The “lemons problem” exists because of

A) transactions costs.

B) economies of scale.

C) rational expectations.

D) asymmetric information.

2) Because of the “lemons problem” the price a buyer of a used car pays is

A) equal to the price of a lemon.

B) less than the price of a lemon.

C) equal to the price of a peach.

D) between the price of a lemon and a peach.

3) Adverse selection is a problem associated with equity and debt contracts arising from

A) the lender’s relative lack of information about the borrower’s potential returns and risks of his investment activities.

B) the lender’s inability to legally require sufficient collateral to cover a 100% loss if the borrower defaults.

C) the borrower’s lack of incentive to seek a loan for highly risky investments.

D) the lender’s inability to restrict the borrower from changing his behavior once given a loan.

4) The ________ problem helps to explain why the private production and sale of information cannot eliminate ________.

A) free-rider; adverse selection

B) free-rider; moral hazard

C) principal-agent; adverse selection

D) principal-agent; moral hazard

5) The free-rider problem occurs because

A) people who pay for information use it freely.

B) people who do not pay for information use it.

C) information can never be sold at any price.

D) it is never profitable to produce information.

6) In the United States, the government agency requiring that firms that sell securities in public markets adhere to standard accounting principles and disclose information about their sales, assets, and earnings is the

A) Federal Communications Commission.

B) Federal Trade Commission.

C) Securities and Exchange Commission.

D) Federal Reserve System.

7) Government regulations require publicly traded firms to provide information, reducing

A) transactions costs.

B) the need for diversification.

C) the adverse selection problem.

D) economies of scale.

8) A lesson of the Enron collapse is that government regulation

A) always fails.

B) can reduce but not eliminate asymmetric information.

C) increases the problem of asymmetric information.

D) should be reduced.

9) That most used cars are sold by intermediaries (i.e., used car dealers) provides evidence that these intermediaries

A) have been afforded special government treatment, since used car dealers do not provide information that is valued by consumers of used cars.

B) are able to prevent potential competitors from free-riding off the information that they provide.

C) have failed to solve adverse selection problems in this market because “lemons” continue to be traded.

D) have solved the moral hazard problem by providing valuable information to their customers.

10) Analysis of adverse selection indicates that financial intermediaries, especially banks,

A) have advantages in overcoming the free-rider problem, helping to explain why indirect finance is a more important source of business finance than is direct finance.

B) despite their success in overcoming free-rider problems, nevertheless play a minor role in moving funds to corporations.

C) provide better-known and larger corporations a higher percentage of their external funds than they do to newer and smaller corporations which rely to a greater extent on the new issues market for funds.

D) must buy securities from corporations to diversify the risk that results from holding non-tradable loans.

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July 1, 2023

Write a sample cover letter that highlights why you would be ideal for a marketing position at a Company of your pick in Florida . In the cover letter, you need to mention the position and discuss the tasks that would be required of you in that position. You can address the cover letter to either a real or fabricated person/organization. Do not address it to “To Whom It May Concern” or “Dear Sir/Madam” or anything else-generic.

Cover Letter Content: • Includes your contact information, date, salutation/greeting (with hiring manager’s full name, title, company, address), body, closing, signature - i.e., major components of a cover letter. • Components are organized logically and overall the letter is attractive. • Letter is concise. • Audience is clear; addressed to real or fabricated person/organization. • Identifies specific position and why you would be ideal for it. Discusses tasks required for that position and knowledge of potential employer. • Discusses your relevant skills, experience, etc. that will make you ideal for the position. • Includes request for interview or meeting with specific manner of follow-up/reverse call to action, note of appreciation, and mentions resume in closing.

BELLOW IS A PART OF MY RESUME TO HELP WRITE THE COVER LETTER.

Summary

Motivated sales driven rental manager focused on attaining a motivated and competitive work environment along with dynamic operating conditions. Customer service oriented and methodical with strengths in accounts maintenance.

Skills

· Key accounts and territory management

· Capital improvement planning

· Systems and automation applications

· Brand management

Experience

Enterprise Holdings | Miami, FL

Assistant Branch Rental Manager

11/2019 – 11/2020

· Remained calm and professional in stressful circumstances and when dealing with unhappy customers, effectively diffusing situations.

· Met with each associate to establish realistic monthly sales goals.

· Strengthened product branding initiatives and coordinated effective marketing campaigns.

· Reviewed employee performance every week and delivered constructive feedback to improve weaknesses.

· Upheld internal standards and productivity goals to meet sales and growth targets.

· Identified growth areas requiring immediate improvement and rolled out marketing program, boosting branch's fleet 16%.

· Executed non-negotiable strategies to foster better customer service and promote positive and engaging environment for all.

· Drove profit increases by leveraging market knowledge and natural leadership talents.

Enterprise Holdings | Miami, FL

Management Trainee

05/2019 - 11/2019

· Ranked 1st place on the sales performance ranking for 4 consecutive months with a total additional revenue of $160,000.

· Achieved a 4-month Customer Service score of 87%, 3 points above corporate average.

· Ran daily sales reports to assess performance and make proactive adjustments.

Equinox | Miami, FL

Sales Associate

10/2017 - 06/2018

· Arranged special accommodations for guests to maintain optimal satisfaction

· Managed all front desk operations for busy high-volume Health Club.

· Confirmed transactional data by verifying name and payment information and clearly communicating costs and fees to patrons.

· Participated Management Assistance, handling member's accounts and payments.

· Supported Membership Advising participating in more than 100 memberships sold.