The assumption of asymmetric information means that
A)borrowers and lenders have the same information.
B)borrowers and lenders have perfect information.
C)borrowers know more than lenders.
D)lenders know more than borrowers.

Question

Quizplus · Accepted Answer

Asymmetric information refers to a situation where one party in a transaction has more or better information than the other. In the context of borrowers and lenders, it typically means that borrowers have more information about their own financial situation and the risk of their investment or loan than the lenders do.

The Assumption of Asymmetric Information Means That