An Important Type of Information Asymmetry Is

question 148

Multiple Choice

An important type of information asymmetry is:

• A)information withholding.
• B)advantage imbalance.
• C)moral hazard.
• D)ethical constraint.

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Definitions:

Cash Flow Hedge

A strategy used in financial risk management to protect against the risk associated with fluctuations in cash flows due to changes in interest rates, foreign exchange rates, or other variables.

Initiation Date

The specific date at which a particular transaction, project, or contract begins.

Forward Contract

A bespoke contract involving two parties for the buying or selling of an asset at an agreed price on a designated future date.

Currency Option

An economic instrument granting the bearer the option to swap currencies at an established rate on a designated date, without the compulsion to proceed.