Moral Hazard

question 117

Multiple Choice

Moral hazard:

• A)is a normative judgement about the moral choices made by economic agents.
• B)is about actions and occurs after parties have voluntarily entered into an agreement.
• C)is always present when adverse selection arises.
• D)All of these statements are true.

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Definitions:

VC Firm

A venture capital firm is a group of investors that provides funding to startups and small companies with strong growth potential in exchange for equity.

Deals

Agreements or transactions, often in a business context, where goods, services, or terms are exchanged.

Average Partner

An individual collaboratively involved in business or activities whose contributions or performance are considered typical or standard.

Venture Capital

Financing provided by investors to startup companies and small businesses with perceived long-term growth potential.