Suppose Cho comes into a large sum of money and decides to lend it out to

Business

1 answer:

Ierofanga [76]3 years ago

8 0

Answer:

C. Adverse selection.

Explanation:

Adverse selection occurs when the participants in a economic transaction do not have the same amount of information about each other: either the buyer has more information than the seller, or the seller has more information than the buyer.

In the question, we have an example of adverse selection because Cho does not have enough information about the buyers (the borrowers), and she does not have a good way to obtain that information.

For that reason, she decides to give the money to the bank, an institution with much more capacity and information about the borrowers. Like this, she is solving the problem of adverse selection.

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3 years ago

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<h3>What is a Capital Budget?</h3>

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2 years ago

Pension plan assets were $200 million at the beginning of the year. The return on plan assets was 5%. At the end of the year, re

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Answer:

Pension plan assets at the year end will be $214

Explanation:

Wee have given pension plan assets = $200 million

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