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Analysis of adverse selection indicates that financial intermediaries, especially banks

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Analysis of adverse selection indicates that financial intermediaries, especially banks

Analysis of adverse selection indicates that financial intermediaries, especially banks
A) must buy securities from corporations to diversify the risk that results from holding non-tradable loans.
B) have advantages in overcoming the free-rider problem, helping to explain why indirect finance is a more important source of business finance than is direct finance.
C) provide better-known and larger corporations a higher percentage of their external funds than they do to newer and smaller corporations which rely to a greater extent on the new issues market for funds.
D) despite their success in overcoming free-rider problems, nevertheless play a minor role in moving funds to corporations.

Textbook

The Economics of Money, Banking and Financial Markets, Business School Edition

Edition: 4^th

Author: Mishkin

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Our course uses > The Economics of Money, Banking and Financial Markets

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valputin Author

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8 years ago

Thank you

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Our course uses > The Economics of Money, Banking and Financial Markets

Meela

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8 years ago

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