Symmetric information is defined as the situation in which _______.
A)investors and managers have identical information about the firm's prospects
B)employees and managers have identical information about the firm's prospects
C)investors and creditors have identical information about the firm's prospects
D)managers have different (better) information about their firm's prospects than outside investors
E)employees have different (better) information about their firm's prospects than managers

Question

Symmetric information is defined as the situation in which _______. 
A)investors and managers have identical information about the firm's prospects
B)employees and managers have identical information about the firm's prospects
C)investors and creditors have identical information about the firm's prospects
D)managers have different (better) information about their firm's prospects than outside investors
E)employees have different (better) information about their firm's prospects than managers

Quizplus · Accepted Answer

Symmetric information occurs when all parties involved in a transaction have access to the same information. In this case, investors and managers would have identical information about the firm's prospects, which would create a situation of symmetric information. Answer B refers to a different group (employees), while C and D describe situations with asymmetric information. Answer E is also incorrect, as it does not refer to the relationship between investors and managers.

Symmetric Information Is Defined as the Situation in Which _______