The concept of adverse selection helps to explain all of the following EXCEPT

A) why firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.
B) why indirect finance is more important than direct finance as a source of business finance.
C) why direct finance is more important than indirect finance as a source of business finance.
D) why the financial system is so heavily regulated.


C

Economics

You might also like to view...

In the table above, the marginal product of the third unit of labor is ________ units of output

A) 3 B) 4 C) 12 D) 16

Economics

Results of the ultimatum game indicate that most people value fairness enough that they will refuse to participate in a transaction they consider unfair, even if they are worse off financially as a result

Indicate whether the statement is true or false

Economics

From the late 1970s to the late 1980s, Hall (1994) finds that leverage buyouts most commonly take place among firms

(a) in the volatile tech industry. (b) facing steep global competition. (c) that are unstable. (d) like those mentioned in all of the above.

Economics

The slope of a line with rise of five and run of two is positive

a. True b. False Indicate whether the statement is true or false

Economics