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

Question

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

Quizplus · Accepted Answer

Asymmetric information refers to the situation where one party in a transaction has more or better information than the other party. In this case, managers have better information about their firm's prospects than outside investors, which creates information asymmetry. Therefore, choice C "asymmetric" is the correct answer.

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