What your colleague considers a low- risk loan

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Reference no: EM133327992

Topic: Business Loan A colleague tells you that he can get a business loan from the bank, but the rates seem very high for what your colleague considers a low- risk loan.

Question 1: Give an adverse selection explanation for this, and offer advice to your friend on how to solve the problem.

Question 2: Give a moral hazard explanation for this, and offer advice to your friend on how to solve the problem.

Reference no: EM133327992

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