PHLB06H3 Study Guide - Stakeholder Theory, Information Asymmetry, Moral Hazard
Document Summary
I expect you to understand the following 20 concepts well. If you do, the exam should be easy for you: moral hazard, mark-to-market accounting. The following two questions will appear on the exam. You will have to answer one of them. (i) warren buffett made headlines when he called derivatives financial weapons of mass destruction . Please explain what you think he meant by this; what is the destruction and how can derivatives bring it about? (ii) If so, provide some examples of unethical behaviour and how it contributed to the crisis. If not, explain what you think the main cause of the crisis was.
