The Concept of Adverse Selection Helps to Explain All of the Following

Multiple Choice

The concept of adverse selection helps to explain all of the following except

A) why firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.
B) why indirect finance is more important than direct finance as a source of business finance.
C) why direct finance is more important than indirect finance as a source of business finance.
D) why the financial system is so heavily regulated.