If borrowers with the most risky investment projects seek bank loans in higher proportion to those borrowers with the safest investment projects, banks are said to face the problem of

In a perfectly competitive market, individual consumers have _____.

(A) Less influence than producers concerning prices. (B) No influence over determining price. (C) More influence than producers concerning prices. (D) More influence than consumers in other market structures.

A lender who is worried that its cost of funds might rise during the term of a loan it has made can hedge against this rise without eliminating the chance to profit from a decline in the cost of funds by

A) buying futures contracts on Treasury bills. B) selling futures contracts on Treasury bills. C) buying put options on Treasury bills. D) buying call options on Treasury bills.