2. If the value of the financial sector is in terms of reducing the individual risk in the economy, how could you measure the value of the financial sector without using information on loan payments (broadly construed to include any interest payment necessary to measure an interest rate or any payment that looks like a return on an investmemt)? If we think of the amount of individual risk remaining after individuals buy portfolios is a measure of the ineffectiveness of the financial sector [or its imperfections], what do you think accounts for these imperfections?
2. If the value of the financial sector is in terms of reducing the individual risk in the economy, how could you measure the value of the financial sector without using information on loan payments (broadly construed to include any interest payment necessary to measure an interest rate or any payment that looks like a return on an investmemt)? If we think of the amount of individual risk remaining after individuals buy portfolios is a measure of the ineffectiveness of the financial sector [or its imperfections], what do you think accounts for these imperfections?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![2. If the value of the financial sector is in terms of reducing the individual
risk in the economy, how could you measure the value of the financial
sector without using information on loan payments (broadly construed
to include any interest payment necessary to measure an interest rate
or any payment that looks like a return on an investmemt)? If we
think of the amount of individual risk remaining after individuals buy
portfolios is a measure of the ineffectiveness of the financial sector [or
its imperfections], what do you think accounts for these imperfections?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51fad9bb-0366-4e8c-8246-656d968a9d4f%2Fdc0c0917-7842-455d-ba28-a80a52fe9df6%2Fwebi7dr.png&w=3840&q=75)
Transcribed Image Text:2. If the value of the financial sector is in terms of reducing the individual
risk in the economy, how could you measure the value of the financial
sector without using information on loan payments (broadly construed
to include any interest payment necessary to measure an interest rate
or any payment that looks like a return on an investmemt)? If we
think of the amount of individual risk remaining after individuals buy
portfolios is a measure of the ineffectiveness of the financial sector [or
its imperfections], what do you think accounts for these imperfections?
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