All categories

3 years ago

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.

You might be interested in

5. A business in its first period of trading charges $4,000 of sales tax on its sales and suffers $3,500 of sales tax on its pur

Katyanochek1 [597]

The unrecoverable sales tax on business entertaining ($250) has been deducted from $3,500

solution

SALES TAX CONTROL ACCOUNT

Payable s $ 3250 Receivables $4000

Balance c/d (owned to tax authority) $ 750

------------- ---------------

$ 4000 $4000

-------------- ----------------

By balance b/d $ 750

8 0

3 years ago

You manage an equity fund with an expected risk premium of 13% and a standard deviation of 44%. The rate on Treasury bills is 6.

Nady [450]

Answer and Explanation:

The computation of the expected return and the standard deviation is given below:

the expected return is

= $90,000 × 13% + $60,000 × 6.6%

= $15,660.00

And,

standard deviation of return is

= $90,000 × 13% × 44% + $60,000 × 6.6%

= $5,148 + $3,960

= $9,108.00

In this way it should be calculated

8 0

3 years ago

The ledger of Marin Inc. on March 31, 2017, includes the following selected accounts before adjusting entries.

Amanda [17]

Answer:

Explanation:

The adjusting entries are shown below:

1. Prepaid insurance expense A/c Dr $280

To Prepaid insurance A/c $280

(Being prepaid insurance is adjusted)

2. Supplies expense A/c Dr $3,005 ($3,970 - $965)

To Supplies A/c $3,005

(Being supplies adjusted)

3. Depreciation Expense A/c Dr $190

To Accumulated depreciation $190

(Being depreciation expense is adjusted)

4. Unearned service revenue A/c Dr $4,680 ($11,700 × 2 ÷ 5)

To service revenue $4,680

(Being unearned service is adjusted)

4 0

4 years ago

If conversion costs are added evenly throughout the production process and the unit have made it 50% of the way through the prod

mestny [16]

Answer: C. 50%

Explanation:

From the above question, If conversion costs are added evenly throughout the production process and the unit have made it 50% of the way through the production process then the percentage completion for conversion costs is 50%

3 0

3 years ago

Marcy's mother, sue, did not want her to date until she was older. she also wanted marcy to attend law school. just before marcy

Ronch [10]

??? What do you need help with.

7 0

3 years ago

Read 2 more answers