Question
In: Economics
Which of the following is NOT true of moral hazard? Select one: It describes a lender's...
Which of the following is NOT true of moral hazard?
Select one:
It describes a lender's problem in verifying borrowers are using their funds as intended.
It arises because borrowers typically know more than lenders.
It would not exist in a world of perfect information.
It describes a lender's problem of distinguishing the low-risk borrowers from the high-risk borrowers.
Solutions
Expert Solution
It describes a lender's problem of distinguishing the low-risk borrowers from the high-risk borrowers.
the above is answer
because there is so many things related to the credit profile of the borrower which can not be ascertain 100%
Rahul Sunny answered 2 years agoRelated Solutions
Which of the following best describes the problem of moral hazard in the labor market? a....
Which of the following best describes the problem of
moral hazard in the labor market?
a.
Earning profits by hiring employees is exploitation and is
unethical.
b.
Honesty isn’t always the best policy – morality can be
hazardous.
c.
Once workers are hired, employers want to motivate those workers
to work hard and be productive even though the workers would likely
rather slack off.
d.
Potential employees have no incentive to reveal their true
abilities or skill levels when applying...
Which of the following best describes the problem of moral hazard in the labor market? a....
Which of the following best describes the problem of
moral hazard in the labor market?
a.
Once workers are hired, employers want to motivate those workers
to work hard and be productive even though the workers would likely
rather slack off.
b.
Honesty isn’t always the best policy – morality can be
hazardous.
c.
Potential employees have no incentive to reveal their true
abilities or skill levels when applying for a job opening, and
employers would like to know this...
Which of the following is NOT an example of moral hazard?
Which of the following is NOT an example of moral hazard? a. a person buys insurance only after finding out that he or she is at high risk. b. a person is less careful about driving after purchasing collision insurance. c. an unemployed worker stays unemployed an extra week, collecting more unemployment insurance, even though a job is available. d. a person only goes to the doctor after finding out that the visit will be covered by insurance.
Which of the following best describes a lien? Select one: a. It is an encumbrance or...
Which of the following best describes a lien?
Select one:
a. It is an encumbrance or claim against property.
b. It is the interest paid on a mortgage.
c. It is a consideration given to the mortgager.
d. It is the title deed of the property mortgaged.
Which of the following describes the definition of assignment? Select one: a. A coverage that is...
Which of the following describes the definition of
assignment?
Select one:
a. A coverage that is free, automatic, and pays over and above
the limit.
b. When the right to sue the party at fault passes from one
party to another (typcially the right to sue passes from the
insured to their insurer after a loss is paid).
c. The process of determining the value of a piece of
property.
d. The transfer of a legal right or interest in...
Which of the following describes a perfect hedge? (Select all that apply) Select one or more:...
Which of the following describes a perfect hedge? (Select all
that apply)
Select one or more:
a. Its a financial transaction that offsets all risks in a
contract
b. It doesn't exist in reality.
c. The loss in one asset will be completely offset by the gain
in the other asset.
d. Correlation Coefficient is +1
Which of the following is an example of moral hazard? 1. a buyer who makes a...
Which of the following is an example of moral hazard?
1. a buyer who makes a large raise in a bid at an auction to
discourage other bidders. 2. a doctor who performs a large number
of in-office tests and is paid per test. 3. an elderly couple who
elect a generous medical insurance policy 4. a board of direcgtors
that is trying to refine the compensation system for its CEO
Which of the following is / are not true about Securitization: - Select one: a. It...
Which of the following is / are not true about Securitization: -
Select one:
a. It is process by which receivables are converted into
securities
b. It is process by which collateral securities are given by
borrowers to financial institutions for loan
c. It is a process by which default risk is transferred to third
parties
d. It is a process in which SPV plays the vital role.
1. Difference between Moral Hazard and Morale Hazard(Attitudinal hazard), Why Moral Hazard is important concept to...
1. Difference between Moral Hazard and Morale Hazard(Attitudinal
hazard), Why Moral Hazard is important concept to insurance
company? Give an example
2. The high cost of liability insurance has made some people
believe that this kind of insurance should be eliminated because
the cost is too high for the society. Do you agree with it? ch. 2
& 19
Which one of the following statements is NOT true? Select one: A. The need for funding...
Which one of the following statements is NOT true? Select one:
A. The need for funding does not end when a company goes public. B.
Approval is obtained from the board of directors to issue
securities. C. The lowest-cost source of external funds is often an
open offer to the public. D. The investment bank decides how much
money the company needs to raise and what type of security - such
as debt, ordinary shares or preference shares - to...
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