There Are Many Concerns for Risk-Averse Lenders

question 78

Multiple Choice

There are many concerns for risk-averse lenders.Consider the following: 1.Lenders are concerned that borrowers with the greatest risk are the ones most likely to actively pursue loans.2.Lenders are concerned that real GDP will decline leading to reduced corporate profits.3.Lenders are concerned that products produced by certain corporations will become obsolete.

• A)1 is market risk;2 is firm-specific risk
• B)2 is market risk;3 is firm-specific risk
• C)3 is market risk;1 is firm-specific risk
• D)2 is firm-specific risk;3 is market risk