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give Q26 correct answer in 10 mins i will give thumb up Banks are willing to spend resources to obtain information about the qualities of
give Q26 correct answer in 10 mins i will give thumb up
Banks are willing to spend resources to obtain information about the qualities of the potential mortgage borrowers. This is because they do not face a free-rider problem. Why not? Because, mortgage loans are not publicly traded. Because, economies of scale reduces the free-rider problem. Because, economies of scope reduces the free-rider problem. Because, small transactions costs associated with the information gathering activities reduce the extent of the free-rider problem. Because, banks usually want to sell the mortgage bonds to some other banks laterStep by Step Solution
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