Respuesta :
Why might you be willing to make a loan to your neighbor by putting funds in a savings account earning a 5% interest rate at the bank and having the bank lend her the funds at a 10% interest rate rather than lend her the funds yourself?
a. Your neighbor suffers from information asymmetry.
b. There will always be a moral hazard problem in lending to a friend or neighbor.
c. There is no way to diversify your savings except with the help of a bank.
d. The costs of writing up the loan contract might exceed the 5% difference between your deposit rate and the bank lending rate.
C. There is no way to diversify your savings except with the help of a bank
The money is deemed to be safest once it has been deposited with a bank. This is so that the commercial bank can restore the money to the depositors at their request. The neighbor, on the other hand, carries a larger risk because there would be no means to recover the money if the neighbor defaulted on the loan. For this reason, the person would be quite eager to deposit the money at the bank so that their neighbor might borrow money from the institution.
To learn more about Bank Saving from the given link.
https://brainly.com/question/1287000
#SPJ4
