Adverse Selection Is a Barrier to Financing Global Growth Because

question 214

Multiple Choice

Adverse selection is a barrier to financing global growth because

• A) firms sometimes have trouble determining whether they need funds or not.
• B) if investors have trouble identifying high-risk firms they may be unwilling to lend funds to creditworthy firms.
• C) there is the possibility that the funds are used for riskier behavior than the lender agreed to.
• D) of the differences between financing using loans, portfolio investment and foreign direct investment.

---

Definitions:

Notation

A system of symbols or marks used for representing information, especially in mathematical or musical contexts.

Financing Statement

A document filed to give public notice of a secured party's interest in the debtor's personal property, used in the U.S. under the Uniform Commercial Code.

Certificate of Title

An official document indicating ownership of property, such as real estate or a vehicle.

Perfect

To complete or make flawless; often used in legal contexts to denote the finalization of a right or claim.