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Asymmetric information may result in the following types of information distortions: underinvestment where the company pays less for an investment that would be expected in

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Asymmetric information may result in the following types of information distortions: underinvestment where the company pays less for an investment that would be expected in frictionless markets: overinvestment where the company pays too much for profitable projects. overinvestment where the company pays less for profitable projects than would be expected n frictionless markets. optimal risk levels on projects underinvestment where the company passes up profitable prolects

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