Our study of information asymmetry revealed:
A)It is where one party to a potential contract has an information advantage over the other party.
B)The markets assume professional traders are well informed.
C)Retail investors must be supplied with relevant information to enable a well-informed decision.
D)It can result in contracts that are not mutually beneficial at the expense of the less informed party.
E)All of these.

Question

Quizplus · Accepted Answer

All of these statements are true regarding information asymmetry. It refers to a situation where one party has an advantage in terms of information over the other party in a potential contract. This can result in contracts that are not mutually beneficial if the less informed party is at a disadvantage. The markets typically assume professional traders are well informed, but retail investors need to be supplied with relevant information to make well-informed decisions.

Our Study of Information Asymmetry Revealed