The Company That Manufactures Screaming Chocolate Zonkers Breakfast Cereal Finds

Multiple Choice

The company that manufactures Screaming Chocolate Zonkers breakfast cereal finds that its sales collapse, it is forced into bankruptcy, and it defaults on its bonds, as a result of information on the filthy conditions in its factory, which had long been known to management, leaking out to the general public. This incident is best thought of as an example of

A) symmetric information in the financial markets.
B) asymmetric information in the financial markets.
C) moral hazard in the financial markets.
D) the generally poor state of sanitation in the food-processing industry in the United States.