(Steps Shown) A banker is thinking of making a loan to a small business. The owner of the business also owns a house and has a $40,000.00 investment in stocks
Question: A banker is thinking of making a loan to a small business. The owner of the business also owns a house and has a $40,000.00 investment in stocks and bonds. What kind of loan contract should the banker write to minimize the cost of moral hazard?
Deliverable: Word Document 
![[Steps Shown] As the U.S. provider of](/images/solutions/MC-solution-library-37517.jpg "[Steps Shown] As the U.S. provider of deposit insurance for banks")
[Steps Shown] As the U.S. provider of deposit insurance for banks
![[Step-by-Step] Calculate the banks excess reserves when](/images/solutions/MC-solution-library-37518.jpg "[Step-by-Step] Calculate the banks excess reserves when the required")
[Step-by-Step] Calculate the banks excess reserves when the required
![[All Steps] Suppose that the bank sells](/images/solutions/MC-solution-library-37519.jpg "[All Steps] Suppose that the bank sells $3 million in securities on")
[All Steps] Suppose that the bank sells $3 million in securities on
(Solution Library) The Federal Reserve closely monitors the reserve
(See Solution) During the debate in 1991 over reform of US banking
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