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in lending means there is a risk that the borrower might engage in activities that are undesirable from the lender's point of view (such as

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in lending means there is a risk that the borrower might engage in activities that are undesirable from the lender's point of view (such as taking high risks in projects) because they make him less likely to pay back a loan. Moral hazard None of the other options Asymmetric information Adverse selection

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