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For a mortgage lender that makes mortgage loans to borrowers, which one of the following would be an example of adverse selection? a . Individuals
For a mortgage lender that makes mortgage loans to borrowers, which one of the following would be an example of adverse selection?
a Individuals most likely to default are the ones most likely to apply for the loan.
b Borrowers investing their loan proceeds differently than the bank requires.
c Individuals least likely to default are the ones most likely to apply for the loan.
d After the loan has been made, individuals become careless with their finances.
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