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valputin valputin
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8 years ago
Adverse selection is a problem associated with equity and debt contracts arising from
A) the lender's relative lack of information about the borrower's potential returns and risks of his investment activities.
B) the borrower's lack of incentive to seek a loan for highly risky investments.
C) the lender's inability to legally require sufficient collateral to cover a 100% loss if the borrower defaults.
D) the lender's inability to restrict the borrower from changing his behavior once given a loan.
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The Economics of Money, Banking and Financial Markets, Business School Edition

The Economics of Money, Banking and Financial Markets, Business School Edition


Edition: 4th
Author:
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Our course uses > The Economics of Money, Banking and Financial Markets
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MeelaMeela
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8 years ago
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valputin Author
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8 years ago
Correct
Our course uses > The Economics of Money, Banking and Financial Markets
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8 years ago
You're very welcome, valputin
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