Which of the following is a technique lenders use to alleviate asymmetric information problems?
A) specialized lending
B) diversified lending
C) requiring collateral
D) all of the above

Question

Quizplus · Accepted Answer

All of the options listed are techniques used by lenders to mitigate the problems caused by asymmetric information. Specialized lending allows lenders to better understand their borrowers and the risks involved, diversified lending spreads the risk across different borrowers or sectors, and requiring collateral provides a form of security against the loan, reducing the lender's risk.

Which of the Following Is a Technique Lenders Use to Alleviate