To Reduce Moral Hazard Problems,banks Include Restrictive Covenants in Loan

question 108

Multiple Choice

To reduce moral hazard problems,banks include restrictive covenants in loan contracts. In order for these restrictive covenants to be effective,banks must also

• A)monitor and enforce them.
• B)be willing to rewrite the contract if the borrower cannot comply with the restrictions.
• C)trust the borrower to do the right thing.
• D)be prepared to extend the deadline when the borrower needs more time to comply.

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Definitions:

Hassle-free Eating

An eating experience that is convenient and requires minimal effort in preparation, making it appealing for busy or convenience-oriented consumers.

Nutritional Value

The content of essential nutrients in a food item, such as vitamins, minerals, and proteins, which contribute to its overall health benefits.

Social Experience

The interaction and communication between individuals in social environments, which can influence attitudes, perceptions, and behaviors.