Banks Help Mitigate the Problem of Moral Hazard in Lending

question 41

Multiple Choice

Banks help mitigate the problem of moral hazard in lending by:

• A) requiring lengthy applications for loans.
• B) making loans to many different types of borrowers.
• C) adjusting the amount of the loan to fit the requirements of the borrower.
• D) monitoring the business after a loan is made to the business.

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Definitions:

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