Problem
1. Why are financial intermediaries willing to engage in information collection activities when investors in financial instruments may be unwilling to do so?
2. What specific procedures do financial intermediaries use to reduce asymmetric information\ problems in lending?
3. Why are asymmetric information problems particularly challenging in developing countries? What does this imply about the importance of financial intermediation and the role of banks in these countries?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.