One Method That Lenders Use to Mitigate the Adverse Selection

question 92

Multiple Choice

One method that lenders use to mitigate the adverse selection problem is to

• A)charge higher interest rates to less creditworthy borrowers.
• B)monitor closely the behavior of borrowers after a loan is made.
• C)ration credit.
• D)provide default insurance.

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Definitions:

Leader Behaviors

The actions and practices exhibited by leaders, influencing their effectiveness in guiding and motivating their followers.

Task-Oriented Behavior

A focus on getting the job done efficiently and effectively, often prioritizing tasks over personal relationships.

Accomplishing Task

refers to successfully completing specific assignments or objectives through effective planning, execution, and resource management.

Efficient

Achieving maximum productivity with minimum wasted effort or expense.