One problem with conflicts of interest is that they can reduce the ________ in financial markets,thereby increasing ________.

Question

Quizplus · Accepted Answer

Conflicts of interest can lead to biased or incomplete information being presented in financial markets, which increases the level of asymmetric information. This ultimately reduces the overall quality of information in financial markets. However, conflicts of interest do not have a direct impact on financial institutions' profits.

One Problem with Conflicts of Interest Is That They Can