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how can the existence of asymmetric information provide a rationale for government regulation of financial markets?

how can the existence of asymmetric information provide a rationale for government regulation of financial markets?

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In the presence of asymmetric information, markets will not function well or, possibly, will not function at all. By requiring publicly traded firms to release information about themselves, the government reduces the asymmetric information problem and encourages financial markets to work better.

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