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2. Pretend that dealers ha: 5 different types of securities, with fundamental values shoWn in the chart below. HoWever, due to information asymmetry, nobody else

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2. Pretend that dealers ha\": 5 different types of securities, with fundamental values shoWn in the chart below. HoWever, due to information asymmetry, nobody else knoWs what type of security the dealer is selling them, and to buyers they all look the same. From our discussion about liquidity risk in class, how many types of securities will end up trading, and what will be the prevailing market price? What is a step that dealers can take or a contract they can offer to help prevent market breakdown? Security Quality Real Value Superior 100 Excellent 95 Good 90 Poor 85 Lemon 80

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