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:

Transcendent God

A concept of a deity that exists beyond and independent from the material universe, often associated with major theistic religions.

Free-Will Solution

A theological and philosophical approach that addresses the problem of evil by attributing its existence to the free choices of individuals rather than to the design of the Creator.

Interfere

To prevent or alter the action or progress of something in a way that is not wanted or is seen as intrusive.

Limited

Restricted in size, amount, or extent; not extensive or expansive.