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Asymmetric information poses two important obstacles to the smooth flow of funds from savers to investors. They are: adverse selection, which arises before the transaction
Asymmetric information poses two important obstacles to the smooth flow of funds from savers to investors. They are: adverse selection, which arises before the transaction occurs, and moral hazard, which occurs after the transaction. moral hazard, which arises before the transaction occurs, and adverse selection, which occurs after the transaction. adverse selection and moral hazard, both of which occur after the transaction. adverse selection and moral hazard, both of which occur before the transaction
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