(Solved):Briefly describe the following term: asymmetric information problems.

 

Question

Briefly describe the following term: asymmetric information problems.

 

EXPERT ANSWER

In the parlance of corporate governance for a given firm, the information asymmetry refers to the situation where the management and executives of a publicly listed firm have more material information as compared to the shareholders of the firm as the former are involved in the active handling of day to day operations of the firm whereas the latter are passive investors

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