When Does Symmetric Information in Financial Markets Exist

question 20

Multiple Choice

When does symmetric information in financial markets exist?  

• A) when borrowers know more about their ability to repay loans than lenders do 
• B) when lenders know more about borrowers than borrowers know about themselves 
• C) when borrowers pay off a loan before it is due 
• D) when borrowers and lenders know more about banking than banks do

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Definitions:

FVTPL

Fair Value Through Profit or Loss, a classification under International Financial Reporting Standards for financial assets held for trading or designated upon initial recognition as measured at fair value, with changes in fair value recognized in profit or loss.

FVTOCI

stands for Fair Value Through Other Comprehensive Income, a classification under IFRS for financial assets that are measured at fair value with fluctuations recorded in other comprehensive income.

Share Price

The price at which a single share of a company's stock is bought or sold in the market.

ASPE

Accounting Standards for Private Enterprises, a set of accounting practices and principles for private companies in Canada.