Liens __________ the moral hazard problem since the borrower is then __________ to sell the affected assets at its discretion.
A) worsen; able
B) worsen; unable
C) ease; able
D) ease; unable

Question

Quizplus · Accepted Answer

Liens ease the moral hazard problem because they restrict the borrower's ability to sell the affected assets, thus reducing the risk of the borrower engaging in risky behavior that could jeopardize the lender's interest.

Liens __________ the Moral Hazard Problem Since the Borrower Is