Q654
In which case is the moral hazard present?
A.
A Bank manager with moderate occasional consumption of alcohol
B.
A race goer with betting habits and usually a heavy consumer of alcohol
AnswerC.
A university professor asking for a large cover on his life
D.
Where in a proposal the nominee is a near dependant of the proposer
Answer: Option B
Solution
Answer: Option B
Solution:
A race goer with betting habits and usually a heavy consumer of alcohol is the moral hazard present. Moral hazard is the risk that a party has not entered into a contract in good faith or has provided misleading information about its assets, liabilities, or credit capacity.