Moral hazard is a problem associated with debt and equity contracts arising from:
a. the borrower's incentive to undertake highly risky investments.
b. the owners' inability to ensure that managers will act in the owners' interest.
c. the difficulty lenders have in sorting out good credit risks from bad credit risks.
d. All of these.
e. only the borrower's incentive to undertake highly risky investments and the owners' inability to ensure that managers will act in the owners' interest of these.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Moral hazard is a problem associated with debt and equity contracts arising from: a. the borrower's incentive to undertake highly risky ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
All of the following are fixed essests except
Answers (1)
Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest will provide $ 9 comma 000 in the first year, and will grow by 5 % per year, forever.
Answers (1)
Which of these investments may pay dividends?
Answers (1)
During the summer you have made the decision to attend summer school, which precludes you from working at your usual summer job in which you normally earn $6,000 for the summer.
Answers (1)
What is one reason why a business owner might choose a for-profit business over a nonprofit business?
Answers (1)
New Questions in Business
Who is Lady gaga? what is she know for?
Answers (2)
The cost of successfully defending a patent in an infringement suit should be
Answers (1)
Product differentiation describes registered differences in product characteristics. only occurs when there is brand loyalty. provides an advantage in the market. is usually nonexistent.
Answers (1)
Firm H has the opportunity to engage in a transaction that will generate $100,000 cash flow (and taxable income) in year 0.
Answers (1)
Louis wrote a check of $100 to the electricity company. After a few days he received a Notice of Dishonor from the bank regarding the check he sent to the electricity company. Why did Brian receive a Notice of Dishonor? A. check was cleared B.
Answers (2)