Banking · Credit Risk
The risk of adverse selection is particularly high in Personal Loans because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The loan amount is always very low.
- 2The loan is used for highly productive business purposes.
- 3It is an unsecured, general-purpose loan, attracting borrowers who may be facing severe, unmanageable financial distress.✓
- 4The collateral is too illiquid to sell quickly.
Correct answer
It is an unsecured, general-purpose loan, attracting borrowers who may be facing severe, unmanageable financial distress.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Banking?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Credit Risk MCQs →Want more practice questions on Credit Risk?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Banking · Credit Risk