Because of the adverse selection problem

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1. Poor people have difficulty getting loans because _____

they typically have little collateral.

they would not benefit from access to financial markets.

both of the above.

neither of the above.

2. Financial intermediaries provide their customers with _____

reduced transaction costs.

increased diversification.

reduced risk.

all of the above.

3. Because of the adverse selection problem, _____

A. lenders are reluctant to make loans that are not secured by collateral.

B. lenders may choose to lend only to those who "do not need the money".

C. lenders may refuse loans to individuals with high net worth.

Both A and B

all of the above

Reference no: EM13876029

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