Information from loan applicants

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A restrictive covenant is a promise a company makes to not exceed certain financial ratios or not conduct certain activities, usually in return for a loan or bond issue. Restrictive covenants on loans are used to avoid moral hazard / adverse selection / free riding (circle one), and loan applications that require a lot of information from loan applicants are used to avoid moral hazard / adverse selection / free riding (circle one).

Reference no: EM133126383

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