Moral Hazard Occurs When a Person's Behavior Changes in a Way

question 6

Multiple Choice

Moral hazard occurs when a person's behavior changes in a way that

• A)is immoral
• B)is inherently dangerous
• C)increases the chances of an unfavorable outcome
• D)increases the likelihood of profit
• E)raises the net welfare of society

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Definitions:

Entitled to Sell

Having the legal right or authorization to sell a particular property or item.

Defaulted

Refers to the failure to meet the legal obligations of a debt, such as not making scheduled loan payments.

Assignment of Mortgage

Assignment of mortgage is the process by which a mortgage holder transfers the mortgage and its associated rights and obligations to another party.

Consent

Consent refers to the voluntary agreement to or approval of what is done or proposed by another; it's essential in legal contexts to validate contracts, medical treatments, and certain interactions.