Identify a condition under which conflicts of interest are exploitable.
A)Market for bank service is very competitive.
B)Banks have monopoly power over their customers.
C)Information flows between the customer and the bank are symmetric.
D)Bank does not possess any information advantage over its customers.

Question

Quizplus · Accepted Answer

When banks have monopoly power over their customers, the customers have limited options and are more likely to be exploited by conflicts of interest. The bank can use its power to prioritize its own interests over those of its customers, without fear of losing business to competitors.

Identify a Condition Under Which Conflicts of Interest Are Exploitable