Question: Q no 1 ) a ) Equity contracts are subject to a particular type of moral hazard problem called the Principal Agent problem. How do

Q no

1)

)

Equity contracts are subject to a particular type of moral hazard problem called the Principal Agent problem. How do debt contracts solve the problem?

)

How are restrictive covenants a solution to the moral hazard problem in debt contracts? Are they effective as a solution?

)

What is asset securitization

?

What are its benefits to borrowers, issuers, and investors?

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