Question 2 2014 April Which of the following best explains the problems arising from information asymmetry? A.Directors do not always have sufficient information with which to reach sound managerial decisions. B.Shareholders cannot process all of the information that is available to them. C. Shareholders feel that they do not have sufficient information to evaluate the behaviour of the directors. D. Some shareholders are better informed than others May I know why C is the best answer ? Can I get a further elaboration or any examples for C?
Hi The Core Reading describes information asymmetry as various classes of stakeholder nor having the same info into the fortunes of a company. C is the only option here relating to more than one class of stakeholder. There are some examples in Chapter 1 Section 3.2
