Banks Help Mitigate the Problem of Adverse Selection in Lending

question 61

Multiple Choice

Banks help mitigate the problem of adverse selection in lending by:

• A) developing expertise in evaluating the business prospects of loan applicants.
• 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:

Capitalization

The use of uppercase letters at the beginning of sentences and proper nouns, following standard grammar rules.

Comma Usage

The set of rules determining how commas are used in sentences to separate clauses, items in lists, and to introduce or interrupt direct speech.

Correct Sentence

A grammatically accurate construction of words that expresses a complete thought, adhering to language rules.

Comma Usage

Refers to the rules and guidelines dictating how commas are used in writing to separate clauses, items in a list, or add a pause for clarity.