Practice Quiz

Financial Planner

Category - Retirement Savings and Income Planning

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What is information asymmetry?
  1. The transfer of knowledge from one party to another
  2. The difference in knowledge of one party and another
  3. The difference in quality assessed by the buyer and quality assessed by the seller
  4. The price of goods and services in a contract
Explanation
Answer: A - When the knowledge of one party in a contract is lower than the knowledge of the other party, information asymmetry occurs.
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