The possibility that a borrower might engage in riskier behavior after a loan has been obtained is

Name: The possibility that a borrower might engage in riskier behavior after a loan has been obtained is
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Moral hazard refers to the risk that a borrower might engage in riskier behavior after obtaining a loan because they assume that the lender will bear the consequences of any losses. This is a result of information asymmetry and can lead to adverse outcomes for the lender.

The Possibility That a Borrower Might Engage in Riskier Behavior