A bank usually treats the moral hazard problem by using all of the following, except:

Name: A bank usually treats the moral hazard problem by using all of the following, except:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Not making loans is not a practical solution for a bank, as it is the primary function of a bank to make loans. The other options listed (requiring collateral, requiring down payments, and restrictive covenants) are all ways for a bank to mitigate the moral hazard problem.

A Bank Usually Treats the Moral Hazard Problem by Using