Asymmetric Information in Financial Markets Exists When

question 63

Multiple Choice

Asymmetric information in financial markets exists when

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

---

Definitions:

Subordinate

An individual who is lower in rank or position and typically reports to a supervisor or manager within an organizational hierarchy.

Internal Attribution

The process of ascribing the cause of a person's behavior to internal characteristics, such as personality or disposition, rather than to external factors.

Insufficient Ability

The lack of necessary skills or competencies required to perform a task or meet objectives effectively.

Close Monitoring

The act of carefully and continuously observing or reviewing a situation, process, or individual's performance.