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  2. Topic
    Business
  3. Study Set
    Money Banking and Financial Markets
  4. Exam
    Exam 9: Banking and the Management of Financial Institutions
  5. Question
    Banks Face the Problem of ________ in Loan Markets Because
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Banks Face the Problem of ________ in Loan Markets Because

Question 18

Question 18

Multiple Choice

Banks face the problem of ________ in loan markets because bad credit risks are the ones most likely to seek bank loans.


A) adverse selection
B) moral hazard
C) moral suasion
D) intentional fraud

Correct Answer:

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