Multiple Choice
A borrower who takes out a loan usually has better information about the potential returns and risk of the investment projects he plans to undertake than does the lender. This inequality of information is called
A) moral hazard.
B) asymmetric information.
C) noncollateralized risk.
D) adverse selection.
Correct Answer:
Verified
Correct Answer:
Verified
Q2: Which of the following is NOT one
Q3: Which of the following is NOT a
Q4: Financial intermediaries' low transaction costs allow them
Q5: A problem for equity contracts is a
Q6: That most used cars are sold by
Q8: A clause in a mortgage loan contract
Q9: The primary loan customer of state-owned banks
Q10: Tools to help solve the adverse selection
Q11: Because of the weak systems of property
Q12: Of the sources of external funds for