If a Team Is Starting a Venture That Will Not

question 4

True/False

If a team is starting a venture that will not need startup capital,then it is appropriate to hold off on the business plan while they establish a base of sales.

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Definitions:

Adverse Selection

A situation in insurance and other markets where buyers and sellers have different information, leading those most likely to incur risks to seek insurance or contracts more aggressively.

Moral Hazard

The situation where one party is willing to take more risks because another party bears the cost of those risks.

Insurance Industry

A sector of the economy composed of companies that provide risk management through the contract of insurance policies, offering protection against financial loss.

Moral Hazard

The situation in which one party engages in risky behavior or lacks incentive to safeguard the other's interests due to protection against the consequences.