A lender usually knows less about the creditworthiness of a borrower than the borrower does. This is an example of:

Name: A lender usually knows less about the creditworthiness of a borrower than the borrower does. This is an example of:
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Question

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Information asymmetry occurs when one party has more or better information than the other party in a transaction, and this is the case in lending where the borrower has more information about their creditworthiness than the lender.

A Lender Usually Knows Less About the Creditworthiness of a Borrower