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vredina [299]
3 years ago
5

One result of asymmetric information about people's ability to repay a loan is that: a bank could make many loans to people who

don't pay them back. lenders are better off than with perfect information. banks will not make loans. loans will only be made to people who don't pay them back.
Business
1 answer:
kifflom [539]3 years ago
4 0

Answer:

Option (a) is correct.

Explanation:

Asymmetric information refers to the situation in which one of two parties involved in the transaction having more information than the other party.

It is evident that an asymmetric information is associated with all types of economic transaction. It is mostly associated with the insurance industry and banking industry.

In our case, banks have less information about the borrower's loan repaying capability and could make many loans to the people who will be the defaulters.

There are two problems arises from the asymmetric information:

(i) Moral hazard

(ii) Adverse selection

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Explanation:

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2 years ago
When Glenn is thirsty, he always buys a Coke. Like many consumers, Glenn engages in considerable alternative evaluation when buy
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Answer:

False

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Cheers.

3 0
3 years ago
A company borrowed $40,000 cash from the bank and signed a 6-year note at 7% annual interest. the present value of an annuity fa
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PV=Pa_{n\rceil r}

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Given that </span>a<span> company borrowed $40,000 cash from the bank and signed a 6-year note at 7% annual interest and that the present value of an annuity factor for 6 years at 7% is 4.7665.

Then

40000=4.7665P \\  \\ P= \frac{40000}{4.7665} =8,391.90

Therefore, </span><span>the annual annuity payments equals $8,391.90</span>
6 0
3 years ago
Fruitlicious is a fruit juice manufacturing company. The company ensures that all the raw materials are used well and minimal wa
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It can be said that Fruitlicious demonstrates Efficiency

<h3><u>Explanation:</u></h3>

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Added means to look at efficiency is the amount of gained hours of great quality productive product sorted by the number of work hours possible in a day. Essentially to expand manufacturing efficiency you want to create added output in the equivalent amount of time

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Learn more here:

brainly.com/question/731472

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