Which of the Following Statements Is NOT Correct About Information

question 132

Multiple Choice

Which of the following statements is NOT correct about information?

• A) It is always desirable for some people to have more information than others.
• B) Adverse selection will not occur if there is full information given to all market participants.
• C) Information plays an important role in how the economy functions.
• D) Asymmetric information may lead to the disappearance of a market.

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Definitions:

Time Value

The idea that money currently in hand is valued higher than an identical sum to be received in the future because of its ability to generate earnings.

Present Value

The present value of a sum of money to be received in the future, or a series of future cash flows, calculated using an agreed-upon rate of return.

Earnings Rate

The rate at which a company or investment generates income, typically expressed as a percentage of the investment or capital.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest from previous periods.