Does collateral reduces moral hazard by borrowers? Why?
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Does collateral reduces moral hazard by borrowers? Why?
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- From the borrower’s standpoint, what are the advantages and disadvantages ofsecuring a loan?What is the difference between interest rate risk and default risk? How do combinations of terms in ARMs affect the allocation of risk between borrowers and lenders?How does interest rate risk differ from reinvestment rate risk? Why is the difference important?
