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Examples of imperfections in the financial system which allow banks to exist include which of the following? A. Informational asymmetry B. Efficiency of markets C. Divisibility of assets D. Adequate liquidity
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Examples of imperfections in the financial system which allow banks to exist include which of the following? A. Informational asymmetry B. Efficiency of markets C. Divisibility of assets D. Adequate liquidity E. All of the examples are of the imperfections that exist.

User Malinosqui
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Answer: A. Informational asymmetry

Step-by-step explanation:

There exists an information asymmetry in the financial markets that rises from people being unable to adequately analyse the riskiness of various business endeavours.

Banks overcome this information asymmetry by having experience and well trained personnel that are capable of adequately assigning risk to ventures and charging them the appropriate interest rate to make a return on that venture.

User Pratik Bhiyani
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