When approaching a bank for a loan, the borrower has better knowledge than the lender about his or her own ability to repay the loan without defaulting.What is this situation referred to as?
A) Principal-agent problem
B) Information asymmetry
C) Experience-curve effect
D) Learning-curve effect

Question

Quizplus · Accepted Answer

Information asymmetries are situations in which one party is more informed than another, because of the possession of private information.

When Approaching a Bank for a Loan, the Borrower Has