CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

An example of adverse selection is when sellers have information about some aspect of product quality, but buyers don't. Adverse selection is an example of:
A. informational frictions.
B. positive externalities.
C. negative externalities.
Explanation: Adverse selection: private information in the hands of SOME, but NOT ALL, market participants, which affects the consumption of goods or services.

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