Asymmetric information in a financial crisis

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Reference no: EM131009784

Which of the following is associated with asymmetric information in a financial crisis?

A. Moral hazard could occur when only borrowers know if the funds will be used to finance? high-risk activities.

B. Adverse selection can occur if lenders must select from a pool of bad credit risks.

C. There is a lack of information about one or more of the parties involved in a transaction.

D. All of the above are correct.

Reference no: EM131009784

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