Suppose Some Members of Enron's Board of Directors Are Aware

question 60

Multiple Choice

Suppose some members of Enron's board of directors are aware of the company's true financial condition, information that is not available to most investors. This is an example of

• A)lemon problem.
• B)moral hazard.
• C)adverse selection.
• D)asymmetric information.

---

Definitions:

Nicotine

A potent chemical found in tobacco plants that is highly addictive and stimulates the brain when inhaled or ingested.

Stimulant

A substance that raises levels of physiological or nervous activity in the body, often used to increase alertness, attentiveness, and energy.

Dopamine

A neurotransmitter involved in reward, motivation, and the regulation of mood, also playing a role in addiction and movement.

Parkinson's Disease

A progressive nervous system disorder that affects movement, causing symptoms such as tremors, stiffness, and slowing of movement.