Financial Intermediaries Typically Require Mortgage Borrowers to Have Homeowner's Insurance

question 50

Multiple Choice

Financial intermediaries typically require mortgage borrowers to have homeowner's insurance and do credit checks before making the loan.

• A)The insurance requirement and the credit check are both designed primarily to reduce adverse selection.
• B)The insurance requirement and the credit check are both designed primarily to reduce the risk of moral hazard.
• C)The insurance requirement is designed primarily to reduce adverse selection;the credit check is designed primarily to reduce the risk of moral hazard.
• D)The insurance requirement is designed primarily to reduce the risk of moral hazard;the credit check is designed primarily to reduce adverse selection.

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Definitions:

Coercive Power

The power or ability to force someone to do something against their will, often using threats or punishment.

Decrement In Salary

A reduction or decrease in the amount of salary or wages paid to an employee.

Relationships With Boss

The dynamic and interaction between an employee and their supervisor, which can significantly impact job satisfaction and productivity.

Job Content

Pertains to the specific tasks, responsibilities, and functions associated with a particular job or position.