Question

When approaching a bank for a loan, the borrower has better knowledge than the lender about his or her own ability to repay the loan without defaulting. What is this situation referred to as

Answer 1

B. information asymmetry

Step-by-step explanation:

Information asymmetry refers to the decision study in which one person has more knowledge about a particular thing as compared with the other person

In the given situation, since it is mentioned that the for loan, the borrower has a better knowledge as compared with the lender with respect to the repay the loan without any default

So this represents the information asymmetry