Who Among the Following Is Most Likely to Encounter the Adverse

question 147

Multiple Choice

Who among the following is most likely to encounter the adverse selection problem?

• A)a salesman at an apparel store
• B)a hairstylist
• C)a manager of a company
• D)a supermarket cashier
• E)a tightrope walker

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Definitions:

Payable to Order

A phrase indicating that a financial instrument, such as a check, is transferable to a specific person or entity mentioned in the document.

Negotiable

Referring to the ability of the terms of an agreement, document, or financial instrument to be adjusted or transferred in accordance with all parties' consent.

Certificates of Deposit

Financial instruments issued by banks that offer a fixed interest rate in exchange for keeping deposited funds untouched for a predetermined period.

Nonnegotiable

Pertaining to a term, condition, or instrument that cannot be altered or bargained upon, often legally or contractually fixed.