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A Bank Is Seeking to Downsize by Offering Workers Incentives

Question 5

Multiple Choice

A bank is seeking to downsize by offering workers incentives to retire early. What problem of adverse selection might this scheme cause?


A) The more risk-averse workers would be more likely to retire early.
B) The more capable workers would be more likely to retire early.
C) Workers would look outside for better opportunities.
D) a and b.
E) b and c.

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