_________________ is the potential for those who want funds for unworthy projects to be the most likely to want to borrow.
A) Moral hazard
B) Herding behavior
C) Contagion
D) Adverse selection

Question

Quizplus · Accepted Answer

Adverse selection refers to the tendency for those who are the most risky or have unworthy projects to be the most likely to seek out and want to borrow funds. This can create a problem for lenders who may be reluctant to lend to those who are a higher risk for default.

_________________ Is the Potential for Those Who Want Funds for Unworthy