Deficit units that utilize indirect means of finance do so because
A) Cost is lower
B) It's a matter of taste (preference)
C) Asymmetric information discourages investors (surplus units) from advancing funds to such units through direct means
D) There are SEC regulations

Question

Quizplus · Accepted Answer

Deficit units use indirect means of finance primarily because asymmetric information makes it difficult for investors to assess the risk, leading them to prefer intermediaries who can better evaluate and manage the risk.

Deficit Units That Utilize Indirect Means of Finance Do So