Chapter Two Financial Markets and Institutions Multiple Choice 1.A market that has no one specific location is termed a(n) market. (a)over-the-counter (b)geographic location (c)intermediary (d)conceptual Answer:(a) 2.Incentive problems take a variety of forms and include: (a)moral hazard (b)adverse selection (c)principal-agent (d)all of the above Answer:(d) 4.The problem exists when having insurance against some risk causes the insured party to take greater risk or to take less care in preventing the event that gives rise to the loss. (a)moral hazard (b)adverse selection (c)principal-agent (d)all of the above Answer:(a) 2-12-1 Chapter Two Financial Markets and Institutions Multiple Choice 1. A market that has no one specific location is termed a(n) ________ market. (a) over-the-counter (b) geographic location (c) intermediary (d) conceptual Answer: (a) 2. Incentive problems take a variety of forms and include: (a) moral hazard (b) adverse selection (c) principal-agent (d) all of the above Answer: (d) 4. The ________ problem exists when having insurance against some risk causes the insured party to take greater risk or to take less care in preventing the event that gives rise to the loss. (a) moral hazard (b) adverse selection (c) principal-agent (d) all of the above Answer: (a)