The Authors' Analysis of Adverse Selection Indicates That Financial Intermediaries

Multiple Choice

The authors' analysis of adverse selection indicates that financial intermediaries

A) overcome free-rider problems by holding nontraded loans.
B) must buy securities from corporations to diversify the risk that results from holding nontradable loans.
C) have not been very successful in dealing with adverse selection problems in financial markets.
D) do all of the above.
E) do only A and B of the above.