As a lender,a bank holds an advantage over any individual person because
A) individuals do not diversify their asset holdings
B) individuals are better at enforcing loan contracts
C) banks have to engage in extensive and costly searches for potential borrowers
D) banks develop expertise in evaluating borrowers' loan applications
E) individuals have extensive knowledge of and experience in writing loan contracts
Correct Answer:
Verified
Q25: If a bank has $1 million in
Q42: Asymmetric information in financial markets exists when
Q43: A bank's assets include all but one
Q44: Banks have more expertise than individual households
Q46: Asymmetric information in financial markets exists when
Q48: In banking,Assets minus Net Worth equals Liabilities.
Q49: Banks help to overcome the problem of
Q50: Banks are financial intermediaries because they
A)receive new
Q51: Which of the following is not a
Q52: The practice of reducing risk through diversification
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