The shadow banking system refers to
1. Non-bank financial firms that provide legal advice on mergers.
2. Non-bank financial firms that acted as stock brokers by buying and selling stocks in an effort to make a profit.
3. Non-bank financial firms that purchased government bonds.
4. The unregulated non-bank financial firms engaged in borrowing from investors and lending to households and firms.

All of them are correct:

Explanation:

The shadow banking system includes financial institutions that do not receive deposits from regular clients (e.g. no checking accounts, no savings accounts), like investment banks, hedge funds, money market funds, payday loans, mortgage lenders, private equity, and other non bank financial institutions.

They act as financial intermediaries that facilitate credits but their activities are not regulated because they do not take money deposits from regular clients.

answer; ( prices are sticky);

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.