1. When investment occurs in developing nations
A. Investors hope to gain significant returns on their investment and local residents how to gain higher rates of economic growth
B. Higher rates of economic growth are usually not achieved
C. Significant levels of corruption usually occur
D. Government politicians usually benefit from the illegal payments made to secure the investment
2. Adverse selection inhibits the financing of global growth because
A. Firms sometimes have trouble determining whether they need funds or not
B. If investors have trouble identifying high-risk firms they may be unwilling to lend funds to creditworthy firms
C. There is the possibility that the funds are used for riskier behaviour than the lender agreed to
D. There are differences between financing using loans, portfolio investment and foreign direct investment