The Concept of Adverse Selection Helps Explain Why Collateral Is

question 83

True/False

The concept of adverse selection helps explain why collateral is an important feature of many debt contracts.

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Definitions:

dN/dS Ratio

A measure used in genetic studies to quantify the relative rate of non-synonymous (dN) to synonymous (dS) mutations, indicating selective pressure.

Neutrally

In a manner that is unbiased, not favoring one side, or in genetics, referring to mutations that do not affect an organism's fitness.

Positive Selection

The evolutionary process by which alleles that confer a fitness advantage increase in frequency within a population, leading to adaptation.

Purifying Selection

A type of natural selection that removes deleterious alleles from a population, leading to a decrease in genetic variation for the traits affected.