Asymmetric information is best defined as:

Question

Quizplus · Accepted Answer

Asymmetric information is a situation where one party in a transaction has more or better information than the other party. This creates an imbalance in the transaction and can cause one party to benefit at the expense of the other. Option A is incorrect because both parties do not have equal access to the information. Option B is incorrect because for there to be a transaction, there has to be some information available to both parties. Option D is incorrect because not all information provided by insiders of the firm can be asymmetric.

Asymmetric Information Is Best Defined As