To the extent that we do not have an owner-operator, then there is going to be some form of lease involved. This is to say that whenever we create a split between who owns the asset vs. who uses the asset, some kind of lease will be necessary.

From there, the lease de facto specifies who bears what kinds of risks associated with the assets themselves.

As such, I come with breadcrumbs.

1. Please define, and give an example of an "endogenous" risk. Please give an example within the context of what we're discussing here - a fitness club and the exercise equipment used by customers.
2. Ditto #1, but this time please expound on "exogenous" risk.
3. "We enter lease agreements ex ante, and we live with the leases ex post." - what does this saying mean in terms of endogenous and exogenous risk, and how does the form of lease make a difference here (think back to DQ 7.1)?
4. Consider COVID - what kind of risk would this be classified as? Someone please discuss how COVID impacted not just health clubs, but all manner of capital assets in the economy? What does this indicate in terms of the losses suffered - recoverable or non-recoverable?