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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 ago
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