Ask Question
BusinessBusiness
1 August, 12:52

Scott is seeking a loan from his bank for a home improvement project. He receives the loan and then decides to take a special vacation opportunity to Las Vegas and enter a gambling tournament. The bank, as a financial intermediary, is facing a problem of

A. symmetric information.

B. moral hazard.

C. adverse selection.

D. liabilities

+4
Answers (1)
  1. 1 August, 13:07
    0
    Answer: Option (B)

    Explanation:

    In discipline such as economics, the situation of moral hazard tends to take place when an individual/party increase their vulnerability to the risk especially when the individual/party is insured, or when the individual takes more risks since other entities are bearing the cost associated with the risks. It may take place where the actions taken by a party may further change to disadvantage of another party once the financial transaction has already been dealt with.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Scott is seeking a loan from his bank for a home improvement project. He receives the loan and then decides to take a special vacation ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
You're considering an investment that you expect will produce a return of 77 percent next year, and you expect that your real rate of return on this investment will be 33 percent. what do you expect inflation to be next year?
Answers (1)
Consider a market in which the government imposes a price floor. Assume that neither supply nor demand is perfectly elastic nor perfectly inelastic. Which of the following groups will always gain from a price floor? A. The government B.
Answers (1)
The relationship between the benefits a consumer receives from a product or service and what they give up to obtain those benefits is known as: a. customer satisfaction. b. sacrifice. c. an exchange. d. customer value.
Answers (1)
A U. S. bank converted $1 million to Swiss francs to make a Swiss franc loan to a valued corporate customer when the exchange rate was 1.2 francs per dollar. The borrower agreed to repay the principal plus 5 percent interest in one year.
Answers (1)
Microeconomics monopolistic competitors are protected by barriers to entry. select one: a. True b. False
Answers (1)
New Questions in Business
Why are career clusters useful in a career search?
Answers (1)
Sumaira is scared that she will not find a job in the current economy. she decides to be a business major and attend one of the top business schools in the country. upon graduation, she is hired by a major investment banking firm in new york.
Answers (1)
Whenever Josh goes to his favorite restaurant, he wants to buy tiramisu, his favorite dessert. Despite the fact he would enjoy the flavor of the tiramisu the same amount every time, Josh only buys it when he would be the only one having dessert.
Answers (1)
A 1,500,000 SF plant employs 300 people and produces 177,000 LCD panel per month. The plant is idle, on average, 2 months each year for maintenance, repairs, and retooling.
Answers (1)
This year Aetna announced it was moving out of Hartford, Connecticut, where it had held it headquarters for over 100 years. The announcement sent shockwaves through an already economically challenged state.
Answers (2)
Home » Business » Scott is seeking a loan from his bank for a home improvement project. He receives the loan and then decides to take a special vacation opportunity to Las Vegas and enter a gambling tournament.
Sign Up Forgot Password?