Multiple Choice
An automobile finance company faces an adverse selection problem if borrowers
A) with a greater chance of defaulting on their car loans get loans from the lender.
B) with no chance of defaulting on their car loans get loans from the lender.
C) choose to get their car loans from a source other than the finance company.
D) choose a 5-year loan as opposed to a 2-year loan.
Correct Answer:
Verified
Correct Answer:
Verified
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