Which of the Following Is NOT True of Adverse Selection

question 30

Multiple Choice

Which of the following is NOT true of adverse selection?

• A)It would not exist in a world of perfect information.
• B)It arises because borrowers typically know more than lenders.
• C)It describes a lender's problem of distinguishing the good-risk applicants from the bad-risk applicants.
• D)It describes a lender's problem in verifying borrowers are using their funds as intended.

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Definitions:

Human Capital Value

The way employees work toward the strategic goals of an organization to achieve competitive advantage.

Strategic Goals

Long-term objectives set by an organization, which guide its direction and strategic planning to achieve desired outcomes and fulfill its mission.

Management Function

The activities or tasks that managers engage in to plan, organize, lead, and control an organization towards achieving its objectives.

Sales Goals

Targets or objectives set for a sales team or individual sales representatives to achieve in a specified time frame.