Adverse Selection Is a Situation Where

Multiple Choice

Adverse selection is a situation where

A) a party of a transaction undertakes an unobservable action at the detriment of the second party after contracting takes place
B) a party of a transaction possesses an unobservable attribute which is unknown to the second party prior to contracting
C) the informed party must send a costless signal to prevent market break down
D) both a and c
E) both b and c