Regulators manage the moral hazard from various protections
Course:- Microeconomics
Reference No.:- EM13696648

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1. Describe ways in which bank regulators manage the moral hazard from the various protections given to the banking industry.

2. Suppose you are graduating and your rich Uncle makes you an offer. You can accept $5,000 from him today or wait 3 years and receive $10,000. What discount rate would make someone indifferent about these two options? (Solve for it and show/describe how).

3. Panic during the financial crisis in 2008 produced what is known as a flight to quality. During this flight to quality, explain what happens to Treasury yields and risk spreads in the bond market.

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