Financial Intermediaries Reduce the Problems in Lending Associated with Information

question 60

Multiple Choice

Financial intermediaries reduce the problems in lending associated with information asymmetries by all of the following except:

• A) collecting and processing standardized information.
• B) screening applicants to be sure they are creditworthy.
• C) monitoring loan recipients to be sure the funds are used properly.
• D) charging interest rates high enough to discourage undesirable borrowers.

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Definitions:

Tangential Response

A reply in conversation that deviates from the main topic or question, often indirectly addressing the subject.

Compliment

A polite expression of praise or admiration towards someone.

Emotional Intelligence

The ability to identify, assess, and control the emotions of oneself, of others, and of groups.

Information Triage

Process of evaluating information to sort good information from less useful or less valid information.