Which could explain the purpose of the visit

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Problem 1: Which problem associated with asymmetric information typically arises before the financial transaction takes place?

A. Moral hazard
B. Adverse selection

Problem 2: We have a mortgage on the warehouse operated by our family business, and the loan is held by a local bank. Next week, the bank vice president will visit our site to see the warehouse. Which of the following could explain the purpose of this visit?

A. Government regulation to reduce principal-agent problems
B. Collection and sale of private information
C. Monitoring to reduce moral hazard
D. Collection of collateral to reduce moral hazard

Reference no: EM132990829

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