The situation in which managers have different (better) information about their firm's prospects than outside investors is known as _____.
A) symmetric information
B) contingent information
C) asymmetric information
D) favorable information
E) unfavorable information

Question

Quizplus · Accepted Answer

Asymmetric information refers to a situation where one party, in this case, managers, has more information than the other party, i.e., outside investors. This situation can lead to adverse selection and moral hazard problems in financial markets.

The Situation in Which Managers Have Different (Better) Information About