Most Individuals Save at Banks Rather Than Lend Directly Because

question 117

Multiple Choice

Most individuals save at banks rather than lend directly because:

• A)The bank creates information asymmetry
• B)Moral hazard exists only when individuals make loans directly to borrowers, it does not occur when banks issue loans
• C)Banks through economies of scale can reduce the cost of information asymmetry
• D)Information asymmetry is a problem for individuals but not for banks

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Definitions:

Sustainability Reporting

The practice of disclosing an organization's environmental, social, and governance (ESG) performance to stakeholders.

Performance Incentive Structure

A compensation system that rewards employees based on their achievement of specific performance targets.

Universal Standards

Principles or criteria that are globally accepted and applied across various industries, fields, or disciplines to ensure consistency, quality, and effectiveness.

Raw Material Inputs

Basic materials that are used in the manufacturing process to produce goods and finished products.