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According to the Finance Literature Related to Informational Asymmetry, One

Question 2

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According to the finance literature related to informational asymmetry, one of the most important roles of an investment-banking firm (in terms of assisting a firm in issuing securities to the public) is to vouch for the value of the security, after it has obtained confidential information from the firm's management about its business strategy.This vouching is known as:


A) certification
B) using a costly signal
C) private negotiation
D) establishing a reputation
E) contract enforcement

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