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Chapter 18: Q. c- For Critical Thinking (page 405)

What types of asymmetric information problems might have existed as a consequence of the control that Myanmar's protected natural monopolies exercised over allocation of investors' funds?

Short Answer

Expert verified

Investment funds allow people to use strategies to speculate in a very kind of financial markets also as well as assets whenever they need.

Step by step solution

01

Introduction.

Investment funds allow people to use strategies to speculate in a very style of financial markets and assets whenever they need. They provide highly flexible conditions for redeeming or transferring assets, further as tax advantages in many jurisdictions.

02

Economy of Myanmar.

Investment funds enable people to use strategies to take position in an exceedingly type of financial markets and assets whenever they need. They provide highly flexible conditions for redeeming or transferring assets, also as tax breaks in many jurisdictions.

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Most popular questions from this chapter

A country's real GDP is growing at an annual rate of 3.1percent, and the current rate of growth of per capital real GDP is0.3 percent per year. What is the population growth rate in this nation?

Identify the key functions of the World Bank and the International Monetary Fund.

Last year, \(100million in outstanding bank loans to a developing nation's government were not renewed, and the developing nation's government paid off \)50million in maturing government bonds that had been held by foreign residents. During that year, however, a new group of banks participated in a \(125million loan to help finance a major government construction project in the capital city. Domestic firms also issued \)50million in bonds and $75million in stocks to foreign investors. All of the stocks issued gave the foreign investors more than 10percent shares of the domestic firms.

a. What was gross foreign investment in this nation last year?

b. What was net foreign investment in this nation last year?

Suppose that a foreign resident is contemplating buying 5 per cent of the shares of a company based in a developing nation but is experiencing difficulty determining whether the firm is riskier than others in that country. What type of investment is this foreign resident considering, and what type of asymmetric information problem is he or she experiencing?

The annual rate of growth of real GDP in a developing nation is 0.3percent. Initially, the country's population was stable from year to year. Recently, however, a significant increase in the nation's birthrate has raised the annual rate of population growth to 0.5percent.

a. What was the rate of growth of per capita real GDP before the increase in population growth?

b. If the rate of growth of real GDP remains unchanged, what is the new rate of growth of per capita real GDP following the increase in the birthrate?
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