Analysis of Adverse Selection Indicates That Financial Intermediaries,especially Banks

Multiple Choice

Analysis of adverse selection indicates that financial intermediaries,especially banks

A) have advantages in overcoming the free-rider problem,helping to explain why indirect finance is a more important source of business finance than is direct finance.
B) despite their success in overcoming free-rider problems,nevertheless play a minor role in moving funds to corporations.
C) provide better-known and larger corporations a higher percentage of their external funds than they do to newer and smaller corporations which rely to a greater extent on the new issues market for funds.
D) must buy securities from corporations to diversify the risk that results from holding non-tradable loans.