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Author Question: A lender faces a(n) ________ problem when the lender lends funds to a borrower for a specific ... (Read 42 times)

gonzo233

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Question 1

A lender faces a(n) ________ problem if borrowers with a greater chance of defaulting on their loans get loans from the lender.


◦ adverse selection
◦ moral hazard
◦ external cost
◦ free‐rider

Question 2

A lender faces a(n) ________ problem when the lender lends funds to a borrower for a specific purpose and the borrower then opportunistically uses the funds for another purpose.


◦ adverse selection
◦ moral hazard
◦ external cost
◦ free‐rider


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Marked as best answer by gonzo233 on Apr 19, 2019

iceage

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