Multiple Choice
Collateral requirements lessen the consequences of ________ because the collateral reduces the lender's losses in the case of a loan default and it reduces ________ because the borrower has more to lose from a default.
A) adverse selection;moral hazard
B) moral hazard;adverse selection
C) adverse selection;diversification
D) diversification;moral hazard
Correct Answer:
Verified
Correct Answer:
Verified
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