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Suppose a bank issued credit cards over the Internet at a fixed interest rate to all approved applicantsfor example, at 9.9 percent. Explain why this
Suppose a bank issued credit cards over the Internet at a fixed interest rate to all approved applicantsfor example, at 9.9 percent. Explain why this bank would face an adverse selection problem. How might the bank solve this problem? Would your solution make some customers unhappy?
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