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The problem of adverse selection helps to explain: A. Why banks prefer to make loans unsecured. B. Why banks do not have advantage in raising
The problem of adverse selection helps to explain:
A. Why banks prefer to make loans unsecured.
B. Why banks do not have advantage in raising funds for businesses.
C. Why borrowers are willing to offer collateral to secure their promises to repay loans.
D. Why government regulations prohibit small firms from acquiring funds in se
curities markets.
E. None of the above.
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