Asymmetric information in financial markets exists when:
a. borrowers reveal their financial details to banks before borrowing funds
b. borrowers know more about their ability to repay loans than lenders do.
c. lenders know more about borrowers than borrowers know about themselves.
d. borrowers pay off a loan before it is due.
e. borrowers and lenders have equal information about borrower creditworthiness.
b
You might also like to view...
From 1948 to 2010, the United States has experienced only 4 recessions
Indicate whether the statement is true or false
Which is not a way that students can use digital cameras for creative expression
The logic of the double-dividend hypothesis may not hold because the Pigouvian tax exacerbates pre-existing distortions in the labor market.
A. True B. False C. Uncertain
A firm is making a long-run planning decision. It wants to decide on the optimal size of plant and labor force. It is considering building a medium-sized plant and hiring 100 workers
Engineering estimates suggest that at those levels, the marginal product of capital will be 100 and the marginal product of labor will be 75. If the wage rate is $5 and the rental rate on capital is $10, is the firm making the right decision? Support your answer.