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?
Find 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 you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Cash receipts received from the issuance of a mortgage notes payable would be classified as a (n) a. noncash investing and financing activity. b. operating activity. c. investing activity. d. financing activity.
Answers (1)
True/False: A. The United States is only a destination for illegal drugs. B. The global drug trade lives up to its name in that nearly all regions of the world are involved, either as a source or destination of illegal drugs. C.
Answers (1)
John buys a $1,000 bond that pays 6% annual interest at 75. what is john's annual yield?
Answers (1)
Which of these are types of income? Check all that apply. Wages commission state taxes services savings investments
Answers (1)
Jenny was feeling frustrated. "What's taking them so long to make a decision? It's been weeks since I first met with them, and they all seem interested in the product. I've also jumped through all their paperwork hoops.
Answers (2)
New Questions in Business
Answer the question on the basis of the following information for a bond having no expiration date: bond price = $1,000; bond fixed annual interest payment = $100; bond annual interest rate = 10 percent. Refer to the given information.
Answers (1)
Other than getting laborers to work their land, how did the sharecrop system benefit landowners? a. Government subsidies provided them with more income. b. Profits were greater than under the slave labor system. c.
Answers (1)
A landlord charges the same apartment rent as last year, but now adds a fee for parking spaces. This practice is known as:
Answers (1)
One year ago, you purchased a stock at a price of $38.22 a share. Today, you sold the stock and realized a total loss of 11.09 percent on your investment. Your capital gain was - $4.68 a share. What was your dividend yield?
Answers (1)
Who is primarily responsible for the people who own the company stock?
Answers (1)