In Situations Where Asymmetric Information Problems Are Not Severe

question 31

Multiple Choice

In situations where asymmetric information problems are not severe,

• A) the money markets have a distinct cost advantage over banks in providing short-term funds.
• B) the money markets have a distinct cost advantage over banks in providing long-term funds.
• C) banks have a distinct cost advantage over the money markets in providing short-term funds.
• D) the money markets cannot allocate short-term funds as efficiently as banks can.

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