Question: Which statement best explains moral hazard?The term refers to a situation where one party cannot observe the actions of another party. The term refers to

Which statement best explains "moral hazard"?The term refers to a situation where one party cannot observe the actions of another party.

The term refers to the fact that some people have more information than others.The term refers to a situation where one party has an information advantage over another. The term refers to the need external parties have for financial information.

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