________ refers to how a firm behaves when it feels it is protected from risk compared with how it would behave if it was fully exposed to risk.
A)Moral hazard
B)Asymmetric engineering
C)Systematic risk transfer
D)Beta blocking

Question

Quizplus · Accepted Answer

Moral hazard refers to a situation where there is an increased likelihood of risk-taking behavior when one party is protected from the consequences of its actions. In this context, if a firm feels it is protected from risk, it may behave differently than if it was fully exposed to risk, as it feels that it will not suffer the negative consequences of any risks taken.

________ Refers to How a Firm Behaves When It Feels