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Adverse Selection and Financial Crises

8 flight to liquidity occurs when investors sell what they perceive to be less-liquid or A higher-risk investments and purchase more-liquid assets, such as U.S. Treasuries. 9orton (2008a) and Ashcraft and Schuermann (2008) provide a detailed description of G the stages of securitization and how asymmetric information problems were created in

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  Flight, Asymmetric

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