The Concept of Adverse Selection Helps to Explain All of the Following

question 42

Multiple Choice

The concept of adverse selection helps to explain all of the following EXCEPT

• A)why firms are more likely to obtain funds from banks and other financial intermediaries,rather than from the securities markets.
• B)why indirect finance is more important than direct finance as a source of business finance.
• C)why direct finance is more important than indirect finance as a source of business finance.
• D)why the financial system is so heavily regulated.

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Definitions:

Menarche

The first menstrual cycle, or first menstrual bleeding, in female humans; marks the possibility of fertility.

Ovulation

Ovulation is the phase in a female's menstrual cycle where a mature egg is released from the ovary, enabling fertilization if sperm is present.

Andropause

A phase in some men's lives, often compared to menopause in women, characterized by a gradual decline in testosterone levels and associated with symptoms like fatigue, depression, and reduced libido.

Hearing Capability

The ability or capacity to perceive sounds by detecting vibrations through an organ such as the ear.