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4.4.2 Market failure in the financial sector

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Question 3

Which one of the following is the most likely to cause market failure in financial markets?

A

Financial advisers having much greater knowledge of complex pension assets than their retail clients

B

Commercial banks increasing interest rates on loans to high-risk startup businesses

C

Credit rating agencies publishing highly accurate, publicly accessible risk profiles of corporate bonds

D

Investment companies aligning their managers' bonuses with long-term portfolio performance

Markscheme

4.4.2 Market failure in the financial sector Questions

  1. A Level
  2. /Economics
  3. /4.4.2 Market failure in the financial sector

9 exam-style questions on Edexcel A A Level Economics 4.4.2 Market failure in the financial sector. Each one has a worked solution and a mark scheme showing where the marks go.

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