Define moral hazard in a financial sense. What must be present for moral hazard to arise? Describe the moral hazard that occurred with the Great Recession of 2007 – 2009.

I’m studying for my Accounting class and need an explanation.

The question to be answered for the essay is:

Define moral hazard in a financial sense. What must be present for moral hazard to arise? Describe the moral hazard that occurred with the Great Recession of 2007 – 2009. How could this type of behavior be avoided in the future?

The text book needed to be referenced:

Financial Management: Concepts and Applications
Stephen Foerster, 2015
Pearson
ISBN.13: 978-0-132-93664-4

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