Moral Hazard

Reflect on the assigned readings for the week. Identify what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding.(Summary of Chapter 19&20).Also, provide a graduate-level response to each of the following questions:

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. Give an adverse selection explanation for this, and offer advice to your friend on how to solve the problem. Give a moral hazard explanation for this, and offer advice
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