Asymmetric information problems are worse the __________ the borrowing firm, since there is __________ publicly available information about those firms.
A) larger; more
B) larger; less
C) smaller; more
D) smaller; less

Question

Quizplus · Accepted Answer

Asymmetric information problems are more severe for smaller firms because there is less publicly available information about them, making it harder for lenders to assess their creditworthiness.

Asymmetric Information Problems Are Worse the __________ the Borrowing Firm