A Borrower Has Information That Is Not Available to a Prospective

question 96

Multiple Choice

A borrower has information that is not available to a prospective lender; this is an example of:

• A) a wise borrower and an unwise lender.
• B) a transfer of risk.
• C) information asymmetry.
• D) liquidity risk.

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Definitions:

Corporate Governance

The system of rules, practices, and processes by which a company is directed and controlled, focusing on the interests of stakeholders.

Shareholder Models

Corporate governance frameworks that prioritize the interests and returns of shareholders in the operations and decisions of a company.

Stakeholder Models

Frameworks for managing a company that consider the interests and influences of all stakeholders, including employees, customers, shareholders, and the community.

Corporate Governance

A system of rules, practices, and processes by which a company is directed and controlled, focusing on the interests of stakeholders.