Because local banks earn fees for each loan, their role to:

A. create not many mortgages perfectly aligns with their incentives.
B. properly assess the risk of each borrower is perfectly aligned with their incentive.
C. properly assess the risk of each borrower is misaligned with their incentive.
D. provide mortgage loans only to those with low credit scores is misaligned with their incentive.


Answer: C

Economics

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