SOLVED

11) “Financial distress” is more easily handled in a __________-oriented financial system, in which ownership of the firm tends to be spread among __________ shareholders than in the other type of system. A) markets; more B) markets; fewer C) banking; more D) banking; fewer 12) In 2002, __________ had the largest dollar value of mergers and acquisitions. A) the United States B) the United Kingdom C) Germany D) Japan 13) Firm ownership in the United Kingdom is largest for A) individuals. B) financial institutions ? agents. C) financial institutions ? ownership/control. D) nonfinancial corporations. 14) It is not surprising to see a rather __________ volume of mergers and acquisitions in Germany given how its __________ conflicts are resolved. A) high; shareholder-lender B) high; manager-stockholder C) low; shareholder-lender D) low; manager-stockholder 15) It is not surprising to see a rather __________ volume of mergers and acquisitions in Japan given its __________-oriented financial system. A) high; banking B) high; markets C) low; banking D) low; markets 16) It is not surprising to see a rather __________ volume of mergers and acquisitions in the United States given its __________-oriented financial system. A) high; banking B) high; markets C) low; banking D) low; markets 17) Banks are better at solving the stockholder-lender conflict than rating agencies when they A) are allowed to hold a substantial ownership stake in the borrowing firm. B) steer clear of holding any ownership stake in the borrowing firm. C) operate in markets-oriented financial systems. D) issue individually-approved loans rather than lines of credit. 18) Stocks and bonds issued in banking-oriented systems are rather __________ because they are traded __________. A) liquid; frequently B) liquid; infrequently if at all C) illiquid; frequently D) illiquid; infrequently if at all 19) Stocks and bonds issued in markets-oriented financial systems are rather __________ because they are traded __________. A) liquid; frequently B) liquid; infrequently if at all C) illiquid; frequently D) illiquid; infrequently if at all 20) The price the United States and the United Kingdom pay for having rather liquid securities markets is A) fluctuations in securities prices. B) unresolved stockholder-lender and manager-stockholder conflicts. C) allowing banks to hold substantial ownership shares in large firms. D) shutting large firms out of those securities markets. 21) Germany and Japan pay a higher price for raising capital because of A) having rather illiquid securities markets. B) unresolved stockholder-lender and manager-stockholder conflicts. C) allowing banks to hold substantial ownership shares in large firms. D) shutting large firms out of those securities markets. 16.4Â Â Financial System Design for Eastern Europe and Other Emerging Economies 1) Eastern Europe is an information-__________ environment, which __________ the use of securities markets for large-firm financing. A) poor; encourages B) poor; discourages C) rich; encourages D) rich; discourages 2) Newly-privatized firms in Eastern Europe require __________ investor monitoring, which suggests the relative desirability of a __________-oriented financial system. A) heavy; banking B) heavy; markets C) little or no; banking D) little or no; markets