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.
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