Which groups are to increase participation in financial

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Problem 1: Which of the following is a key restriction of debt financing arrangements?

A. Legal costs associated with constructing debt contracts are not tax deductible, which is a high cost for US borrowers.
B. Most corporate debt assumed by US corporations is valued in euros, so the corporations face considerable exchange rate risk.
C. Debt contracts are typically complicated legal documents that impose restrictions on the borrowers.
D. Debt contracts are typically complicated legal documents that impose substantial restrictions on the lenders.

Problem 2: Suppose we could eliminate the transaction costs associated with financial markets. Which of the following groups are likely to increase their participation in financial markets as a result of this change?

A. Small borrowers and savers
B. Foreign borrowers and savers
C. Large corporations
D. Large borrowers and savers

Reference no: EM132990822

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