Moral Hazard Occurs When

question 5

Multiple Choice

Moral hazard occurs when:

• A) the failure of one financial institution can bring down other institutions as well.
• B) financial institutions take on too much risk because they are insured.
• C) financial institutions become insolvent because they issued too many loans.
• D) there are more short-term liabilities than short-term assets.

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Definitions:

High Self-Esteem

A positive evaluation of oneself and one's abilities, often reflecting confidence and satisfaction in various aspects of life.

Less Qualified

Having fewer credentials, experience, or skills compared to others in a specific context or for a particular job.

Approach-avoidance conflict

A psychological dilemma experienced when a single goal or event has both attractive and repulsive aspects, causing both a desire to approach and an urge to avoid.

Entrance scholarship

An entrance scholarship is a financial award provided to students upon entering a college or university, usually based on academic merit or other criteria.