The authors' analysis of adverse selection indicates that financial intermediaries in general, and banks in particular (because they hold a large fraction of nontraded loans),
A) have advantages in overcoming the free-rider problem, helping to explain why indirect finance is a more important source of business finance than direct finance.
B) play a greater role in moving funds to corporations than do securities markets as a result of their ability to overcome the free-rider problem.
C) provide better-known and larger corporations a higher percentage of their external funds than they do to newer and smaller corporations, which rely to a greater extent on the new issues market for funds.
D) all of the above.
E) only A and B of the above.
E
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After purchasing a car from a dealership, Martin is told by the dealership that the interest rate will be higher than what he has agreed to when he bought the car. The dealership has probably violated ______________ laws.
A. Packaging and labeling B. Cooling-off C. Tying agreement D. Reciprocal dealing E. Truth-in-lending
Long production runs, poor material flows, and processes that are not tightly linked to one another can cause over 90% of a product's lead time to be spent waiting
Indicate whether the statement is true or false