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    Business
  3. Study Set
    Contemporary Financial Intermediation
  4. Exam
    Exam 7: Spot Lending and Credit Risk
  5. Question
    The Use of Collateral in Bank Lending Can
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The Use of Collateral in Bank Lending Can

Question 45

Question 45

Multiple Choice

The use of collateral in bank lending can


A) induce the borrower to provide inadequate effort to manage a project
B) induce the borrower to overinvest
C) reduce moral hazard problem
D) all of the above
E) a and c only

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