In Financial Markets,asymmetric Information Exists When

question 90

Multiple Choice

In financial markets,asymmetric information exists when

• A)one party to a transaction has more knowledge of relevant details than the other does
• B)both parties to a transaction have less knowledge of relevant details than the Fed does
• C)lenders know more about the borrowers than the borrowers know about themselves
• D)all parties to a transaction have exactly the same information
• E)all the information which the parties have is inaccurate

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Definitions:

Passive Margin

A continental margin that is not a plate boundary.

Seafloor Age

The age of the oceanic crust, which increases with distance from mid-ocean ridges where new crust is formed.

Crust Age

A measure indicating the age of the Earth's crust, which varies based on location, with the oceanic crust generally being younger than the continental crust.

Spreading Center

A tectonic plate boundary where new crust is created as two plates pull away from each other.