Private Information-Collection Firms Fail to Eliminate the Adverse Selection Problem

question 72

Multiple Choice

Private information-collection firms fail to eliminate the adverse selection problem because

• A)the law does not allow them to disclose private information about the creditworthiness of firms.
• B)they do not monitor borrowers after loans have been made.
• C)some investors who do not pay for their services will still profit from them.
• D)most companies refuse to provide them with any information.

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Definitions:

Reward Systems

Structured programs within organizations designed to recognize and provide incentives for employee performance and contributions towards achieving business goals.

Fringe Benefits

Additional non-wage compensation provided to employees, such as health insurance, retirement plans, and paid time off.

Individual Performance

The level of output or success achieved by a single person in their professional duties, often assessed in terms of quality, quantity, and timeline adherence.

Organizational Hierarchy

A system within a company or organization that ranks positions in an ascending order of authority and responsibility.