____ refers to the argument that officers and managers have access to information about the expected future earnings of the firm that is not available to outside investors.
A) Insider trading
B) Asymmetric information
C) Signaling effect
D) Pecking order theory

Question

Quizplus · Accepted Answer

Asymmetric information refers to the situation where one party in a transaction has more or better information than the other party. In the case of officers and managers of a firm, they may have access to information that is not available to outside investors, which can create an unfair advantage when making investment decisions. This can lead to accusations of insider trading if the information is used to make trades based on that knowledge.

____ Refers to the Argument That Officers and Managers Have