Describe some of the information problems

Reference no: EM131305120

1. If everyone were perfectly honest, would there be a role for financial intermediaries?

2. Describe some of the information problems in the financial system that lead firms to rely more heavily on internal funds than external funds to finance their growth. Do these information problems imply that firms are able to spend less on expansion than is economically optimal? Briefly explain.

Reference no: EM131305120

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