If Bad Credit Risks Are the Ones Who Most Actively

question 93

Multiple Choice

If bad credit risks are the ones who most actively seek loans and,therefore,receive them from financial intermediaries,then financial intermediaries face the problem of

• A)moral hazard.
• B)adverse selection.
• C)free-riding.
• D)costly state verification.

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Definitions:

Environments

The surroundings or conditions in which an organism lives or operates, including natural, social, and built contexts.

Traits

Characteristics or qualities that form an individual's distinctive character, often considered to be innate and stable over time.

Emotional Instability

A characteristic of individuals who experience rapid, intense emotional changes that are difficult to predict.

MMPI

Minnesota Multiphasic Personality Inventory, a psychological assessment that evaluates personality traits and psychopathology.