Practice Quiz

Financial Planner

Category - Retirement Savings and Income Planning

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What is screening?
  1. A process where an uninformed party requests additional information from the informed party
  2. The active conveyance of information by the party with more knowledge
  3. Creating a filter of transferring knowledge by using a third party
  4. Performing background checks on another party
Explanation
Answer: A - There are two ways that parties can use to reduce information asymmetry. One of these is screening, where the uninformed party requests additional information from the informed party.
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