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:

Own Business

The ownership and management of a commercial enterprise by an individual or group.

Approximately 50 People

An estimation suggesting that the number of individuals involved or in question is around fifty.

Human Resource Management

The strategic approach to the effective management of people in an organization, focusing on enhancing their contributions to the success of the organization.

Organisations

Groups of people structured in a specific way to achieve common goals or undertake particular activities, often through a coordinated effort.